A meeting of friends – “special friends,” in actual fact. That’s how Italy’s Foreign Minister Angelino Alfano described the 8th Italy-Latin America and Caribbean Conference. It was held at the foreign ministry’s Rome headquarters, the Farnesina palace, on 13 December. Alfano described the conference, which takes place every two years, as “the most important opportunity for encounter and dialogue between Italy and the continent of Latin America.” The latest edition coincided with the 50th anniversary of the Italian-Latin American Institute (IILA), the conference’s promoter.
In his speech welcoming delegates Alfano, who is Sicilian, recalled that he is from a region “where Italy ends and Africa begins,” a land of migrants, many of whom left to settle in Latin America. “A special friendship exists between South America and us,” the Minister said. “It’s often based on blood ties, so it can be described as a family relationship. In the IILA we nurture the Latin character that unites us. We have a huge presence in Latin America - there are 50 million people of Italian descent, and two million of them hold Italian passports. Then there are 3,000 Italian companies. We live in a globalised world where English is the lingua franca, whereas it used to be Latin, and we Latin peoples have many shared characteristics. These characteristics should be both safeguarded and promoted, as they can also be passports to the world. That’s why we’ve invested considerable human and industrial capital in Latin America.”
It is for this reason that the conference, which “has inspired a wide-ranging collaboration to develop a shared response to the challenges presented by globalisation,” is so important.
The key conference themes of combating corruption as a way of promoting growth, and the sustainability objectives set out in the UN’s Agenda 2030, were joined by a third – connectivity in the region, especially in the energy sector, with special reference to the role of networks in developing renewables. This is a subject of great mutual interest given that, as Confindustria (the Italian equivalent of the CBI – ed) Vice-President Licia Mattioli emphasised, “Italy has a great deal of expertise in renewables, and Latin America has incredible potential in this sector.”
This is the reason behind the IILA’s decision to invite Enel CEO and MD Francesco Starace to the event. Starace addressed the foreign Ministers and ambassadors of most of the 33 Latin American and Caribbean countries assembled in the conference’s auditorium. Their presence was evidence of Latin America’s importance for Enel, in terms of the group’s development and growth strategies. Starace began by reminding his audience that Enel is present in 10 Latin American countries (Chile, Brazil, Argentina, Peru, Colombia, Uruguay, Mexico, Panama, Guatemala and Costa Rica), and in some of them it is the main private operator in the energy sector. Starace highlighted the region’s potential in terms of generating renewable resources, the substantial absence of conflict and terrorist threats, as well as recent urbanisation. He also presented data that confirmed Latin America’s importance in Enel’s geographical strategy.
“Over the past three years we have invested €10 billion in Latin America, including €3 billion in network development, more than €5 billion in renewable energy and €1 billion in the acquisition of new concessions. Latin America generates an EBITDA of over €4 million for the Enel group, around 30% (28.5%) of the group’s total, and is home to 19 million of its clients. The company’s plan shows how Latin America is gaining importance for Enel. It predicts that in 2020 the region will contribute over 50% of the growth of the group’s EBITDA. It should account for an overall level of 47%.”
“Latin America is extremely rich in renewable energy sources,” Starace continued. “According to figures from IRENA, excluding large hydro, between 2006 and 2015 the continent tripled its installed capacity of renewable sources. The sector is experiencing extremely rapid growth and now provides jobs for around two million people. However, there is still a great need for investment in infrastructure because this area remains less connected to the outside world. At the moment our investment targets both generation of renewable sources and distribution, in line with a model that places great emphasis on sustainability. Among other things, this model has enabled us to undertake the 523 projects currently under way in the 10 countries where we have a presence.”
Our group’s CEO then pointed out an important aspect of the Latin American dynamic: the rapid urbanisation taking place there. It is reaching a level of 80% compared to a world average of 54%. This offers significant opportunities for the companies involved in the energy sector.
Starace then described two aspects that are vital to the development of a new energy paradigm. First and foremost, he talked about the importance of stable, forward-looking and never retro-active regulatory frameworks, which are a necessary condition for attracting investment in the renewables sector. He observed that some Latin American countries have made intelligent moves in this context, setting up regulatory systems that are sometimes superior to their European counterparts. As a consequence, they have obtained an extremely positive reaction from investors.
Mr Starace went on to talk about the new energy paradigm’s second vital aspect: the need to speed up the digitalisation process. This is particularly relevant to infrastructure and the energy system. Technology needs to be used not only for bringing down the related costs but also for taking advantage of the exciting opportunities that are emerging in the energy sector, increasing the potential of renewables and developing new business areas.