The Panama Canal is exposed to specific hydrological risk, as reduced rainfall in the Gatún Lake watershed could again lower water levels, leading to draft restrictions and revenue pressure.
Fitch Ratings says El Niño poses broad weather-related risks for Latin America’s transportation sector and could pressure credit profiles across some subsectors. The U.S. National Oceanic and Atmospheric Administration confirmed the onset of El Niño on June 11, 2026.
Countries along the Pacific coast and Andean corridors could face heavy rainfall and flooding, raising the risk of physical damage and transportation operational disruptions. Physical damage due to weather-related events is often covered by insurance, but these events can still cause service interruptions and reduce revenues.
Beyond physical damage, transport infrastructure credits are also exposed to demand risk, as El Niño could pressure agricultural production and reduce cargo volumes across agriculture-intensive corridors.
Diversified cargo bases and structural protections such as take-or-pay contracts, grantor payment mechanisms, and flexible debt structures partly mitigate these pressures.
Toll roads in the region are more exposed to extreme weather events given their reliance on agricultural product traffic.
In Brazil, highways with high agribusiness exposure have high demand risk from a shorter planting window in the 2026/2027 crop season and reduced river navigability in the North due to droughts, which could dampen grain transportation volumes.
The 2024 drought in the Center-West is a recent example of weather events affecting grain harvests and indirectly pressuring highway traffic, which led to Fitch taking negative rating action.
Seaports, airports, and railroads face similar physical damage exposure but more limited volume risk.
Seaports are vulnerable to physical damage from heavy rain and flooding, affecting port access roads and increasing dredging and maintenance needs. Most Latin American seaports handle diversified cargo bases, reducing reliance on any single commodity. Peruvian ports may face some of the most intense regional impact, including coastal flooding and storm surges, with concentrated exposure to perishable agricultural exports such as fruits and vegetables.
The Panama Canal is exposed to specific hydrological risk, as reduced rainfall in the Gatún Lake watershed could again lower water levels, leading to draft restrictions and revenue pressure. Nevertheless, rain during Panama’s recent dry season in December-April helped to fill reservoirs, suggesting that the country can cope with any El Niño-related dry conditions.
Airports could see operational disruptions and softer air cargo volumes in markets with meaningful agricultural sector exposure, though passenger traffic revenues limit overall credit sensitivity.
Caribbean airports could even benefit, as El Niño typically suppresses Atlantic hurricane activity and may support passenger traffic and provide a favorable window for maintenance and repair works through year-end. Railroads face the lowest revenue risk among transport subsectors as they retain a structural demand advantage even during crop disruptions.
Structural protections partly mitigate the credit impact across subsectors. El Niño-related weather events may qualify as force majeure for many infrastructure concessions, triggering financial rebalancing mechanisms. Brazilian railroad concessionaires also benefit from take-or-pay contracts that limit volume volatility, and some are further protected by minimum volume agreements with main clients.
Colombian toll road concessions structured under the public-initiative 4G program offer an additional layer of protection, with toll revenues supported by a guaranteed minimum net present value and the grantor compensating for collection shortfalls on a five-year rolling basis.