New $100M Energy Loan Program Bans China/Russia Ties, Prioritizes Clean Power in Latin America

The “Las Americas Energy Security Act” is essentially a new foreign policy tool wrapped in an energy infrastructure financing package. This bill sets up a sovereign lending program, managed by the Treasury, that authorizes $100 million annually from Fiscal Year 2026 through 2031 to help countries in Latin America and the Caribbean meet their energy needs. The core purpose is to stabilize energy markets in the region, push for a transition to clean energy, and, critically, increase U.S. influence while reducing the footprint of strategic rivals like China and Russia.

The Clean Energy Loan Program: Zero-Interest, Zero Austerity

Starting within 30 days of the bill’s enactment, the Treasury Department is tasked with establishing this lending program. The money is earmarked for specific activities: projects that transition countries to clean energy, technical assistance to build a pipeline of clean energy projects, and financing U.S. companies to invest in renewable energy in smaller markets. The loans themselves are designed to be relatively borrower-friendly: they must be either zero-interest loans for up to 30 years or low-interest concessional loans for up to 50 years. Crucially, the loan terms cannot require the borrowing country to implement austerity measures that increase poverty or inequality, which is a significant departure from typical international lending practices that often hit local populations hard.

The Geopolitical Screen: Who Gets the Money?

This isn’t just about clean energy; it’s about foreign policy. To get a loan, a country has to submit a detailed application showing the project’s economic viability, carbon impact, and potential for creating equitable jobs. But here’s the kicker: the application must include a certification that no funds will be used to purchase commodities from, or support, any corporation or state-owned enterprise with an ownership relationship with the Government of the People’s Republic of China, the Chinese Communist Party, or the Government of the Russian Federation. This is a direct shot at countering their influence in the region’s infrastructure development. Furthermore, the Secretary of State gets to play favorites, giving preference to countries that share “democratic values, respect for human rights, and economic freedom”—specifically naming members of the Alliance for Development in Democracy and CARICOM. This means the funding is explicitly being used to reward political alignment.

Expanding U.S. Investment Reach

Beyond the loan program, Section 4 of the bill focuses on using U.S. federal agencies to prioritize and fast-track energy security projects in the region. This is where things get interesting for the U.S. International Development Finance Corporation (DFC), the agency that finances private development projects. Typically, the DFC is restricted from investing in upper-middle-income or high-income economies. This bill, however, creates an exception to the BUILD Act limitations, allowing the DFC to support projects in those wealthier countries if the President certifies it furthers U.S. national security or foreign policy interests. This DFC exception can be used if the project is designed to help the poorest populations or, more strategically, if the support is “necessary to preempt or counter efforts by a strategic competitor of the United States.” In plain terms, if China is eyeing a major energy project in a wealthier country like Chile or Panama, the DFC can now step in to block them, even if that country wouldn’t normally qualify for DFC aid. While this could lead to better energy infrastructure, it also gives the President significant power to greenlight DFC projects based on geopolitical competition rather than strict developmental need, potentially benefiting U.S. contractors and suppliers.