Week 27, 2024 - Latin America

Newsletter
The World Investment Report 2024 highlights that Foreign Direct Investment (FDI) to Latin America. The region saw increased value in greenfield investments in critical minerals and renewable energy sectors, signaling a shift towards sustainable and resource-centric economic activities, despite global economic challenges. Five key...
Published on
July 5, 2024

"To dream is to forget reality.” - Machado de Assis (Brazilian novelist)

MARKETS

July 4, End Of Day

BUSINESS

Foreign Direct Investment Trends

The World Investment Report 2024 highlights that Foreign Direct Investment (FDI) to Latin America. The region saw increased value in greenfield investments in critical minerals and renewable energy sectors, signaling a shift towards sustainable and resource-centric economic activities, despite global economic challenges. Five key trends in FDI to Latin America include:

1. Overall FDI Numbers: In 2023, FDI inflows to Latin America and the Caribbean were relatively stable, decreasing slightly by 1% to total $193 billion. This stability in FDI indicates that the region maintained its share of global FDI inflows, demonstrating resilience in its ability to attract foreign investment despite broader economic pressures.

2. Sectoral Investment: The region saw an increase in the value of greenfield investment announcements due to large projects in commodity sectors, critical minerals, and renewable energy sources such as green hydrogen and green ammonia. These sectors are significant because they align with global trends toward sustainable and resource-efficient investments.

3. Challenges in Project Finance: Latin America and the Caribbean, similar to other regions, experienced a decline in international project finance deals. This decrease was particularly noted in infrastructure investment, which was affected by tighter financing conditions globally.

4. Digital Government and Investment Facilitation: The report emphasizes the importance of digital government solutions that aid investors and strengthen governance. For Latin America and the Caribbean, improving digital governance could enhance the investment climate and administrative efficiency, making the region more attractive for foreign investments.

5. Economic and Policy Environment: The investment policy trends in the region reflected a focus on facilitating and promoting investment through various measures. However, there were also heightened precautions against foreign investments in critical sectors, indicating a cautious approach towards maintaining strategic control over important industries.

Fundraising picks of the week

Wiagro: Wiagro is an Agtech innovator dedicated to digitizing post-harvest processes. Wiagro has digitized over 500,000 tons of produce, preventing the loss of over 7,500 tons of grain at risk. Dive deeper into the case here.

Mokens League: The platform has quickly garnered attention with 68,000 pre-registered users and more than 140 unique NFT designs tailored for e-sports and streaming. This multiplayer and multiplatform initiative supports cross-play from day one. Dive deeper into the case here.

Beu: Beu is revolutionizing monetization and ownership for creators. In its first 15 months, Beu achieved a remarkable 2.6M with a consistent growth rate of over 30% MoM. Dive deeper into the case here.

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Dive deeper into other fundraising firms in LatAm here.

CURRENT AFFAIRS

Mexico: President-elect Claudia Sheinbaum plans to achieve 50% renewable energy by 2030 while maintaining state-owned CFE's control over 54% of energy generation. Despite her support for fossil fuel-friendly policies and underinvestment in the sector, Sheinbaum's background in energy engineering gives hope. Proposed judicial reforms complicate private investment, but some experts remain optimistic about new renewable projects.

Peru: Peru and China have completed substantial negotiations to upgrade their free trade agreement. Presidents Dina Boluarte and Xi Jinping discussed cooperation in minerals, energy, and agriculture. They signed agreements on grape exports and establishing a business council. China is Peru's top investor and main market for copper. Boluarte invited Xi to inaugurate the Chancay megaport in November during the APEC summit.

Bahamas: The Bahamas will regulate commercial banks to ensure access to the Sand Dollar, its central bank digital currency launched in 2020. Central Bank Governor John Rolle announced that regulations should be in place within two years to boost adoption, currently below 1% of currency in circulation. The Bahamas remains a leader in CBDC development, closely watched by over 130 countries exploring digital currencies.

FURTHER READING

Check our recently published insights here. Recent post:

🌱  FoodTech Innovations in Latin America

Latin America is pioneering FoodTech innovations, leveraging technology and sustainability to revolutionize food security, supply chain efficiency, and environmental sustainability.

Key Innovations:

  1. 🌿 Alternative Proteins: Plant-based, insect-based, and lab-grown proteins are reshaping diets across the region, driven by consumer demand and innovative startups.
  2. 🌾 Precision Agriculture: Utilizing drones, IoT, and AI to enhance traditional farming, increasing efficiency and reducing environmental impact.
  3. 🚚 Food Delivery and Logistics: Expanding online delivery services with advanced logistics and ghost kitchens, transforming meal access in urban areas.
  4. 🍽 Personalized Nutrition: Data-driven, personalized dietary recommendations are emerging through DNA-based diets and smart appliances.
  5. ♻️ Waste Reduction: Innovations like upcycled foods and smart packaging are advancing sustainability and reducing food waste.

🔍 Read more here.