South American leaders agree on energy integration

The Brazilian summit was part of the new government's push to rebuild its role as a regional leader, after ties frayed under the previous administration

South American leaders gathered in Brasilia on 30 May, where they agreed to expand co-operation and integration in the region, including joint energy transition efforts and investments in climate change mitigation.

Brazilian president Luiz Inacio Lula da Silva hosted presidents and representatives from 11 countries as part of his efforts to strengthen regional ties, which had frayed during the presidency of his predecessor Jair Bolsonaro.

Leaders signed the "Brasilia consensus", under which they agreed to work to expand co-operation and integration. They pledged to create a mechanism to finance climate change mitigation projects and to promote joint energy transition efforts, as well as investments to expand energy exchange.

They also agreed to present a list of priorities and to delineate concrete measures to consolidate regional integration over the next 120 days.

The summit was an attempt by the Lula government to rebuild its role as a regional leader, as China continues to expand its influence and economic importance in the continent.

Lula defended a series of policy proposals aimed at increasing regional economic integration, including the creation of a common currency to facilitate trade and reduce the region's "dependence" on other currencies. This has been a recurring theme of his government — Lula suggested conducting commodities trade in yuan during his trip to China in April and the creation of a currency to facilitate trade within the Mercosur bloc.

On energy, Lula focused on the need for integration, calling on regional countries to begin discussions on the creation of a South American market. This would contribute to "secure [energy] supplies, the efficient use of resources", as well as "fair prices and social and environmental stability", he said.

Lula also urged regional leaders to develop co-ordinated efforts to help mitigate the impact of climate change.

Venezuela steals show

The summit marked Venezuelan president Nicolas Maduro's return to Brazil after an eight-year hiatus. Lula and Maduro agreed during a bilateral meeting to work to resume Venezuelan electricity exports to Roraima state in northern Brazil, which historically relied on Venezuela for roughly half its power, but started to suffer from intermittent blackouts from 2016. Power supplies from Venezuela halted completely in 2019.

Lula defended investments in the interconnection with Venezuela and said Brazil should resume power purchases from the country. Maduro said Venezuela has 120MW available for export. The two countries are assessing the possibility of using the power exports to repay part of Venezuela's debt to Brazil.

Brazilian state-controlled Petrobras' chief executive Jean Paul Prates also announced an intention to resume investments in the region, including Venezuela.

Lula described Venezuela as a democracy in his meeting with Maduro, arguing that it has been the victim of an "anti-democratic and authoritarian narrative". But Uruguayan president Luis Lacalle Pou and his Chilean counterpart Gabriel Boric criticised this view, stressing serious human rights violations in Venezuela.