A smart city uses data, sensors, and digital platforms to manage transport, energy, and public services efficiently. In 2026, the Smart City Expo LATAM Congress in Puebla and a financing package of 12,000 million dollars from the Development Bank of Latin America and the Caribbean (CAF) marked the region's progress, with Mexico among the best positioned.
What a Smart City Is and What Is at Stake
The term smart city describes an urban management model that combines sensors, connectivity, and data analytics to optimize services such as public transport, street lighting, garbage collection, security, and energy consumption. It is not a single type of technology, but a strategy that integrates physical infrastructure with digital platforms and, increasingly, artificial intelligence.
What is at stake is the ability of Latin American cities to absorb accelerated population growth without collapsing their mobility, their energy supply, or their public finances. According to the IMD Smart City Index 2025, which measures citizen perception of infrastructure, technology, and human development in cities around the world, Medellín ranks 118th globally, the highest position among the Latin American cities evaluated, followed by Mexico City at 119 and Santiago de Chile at 120.
That ranking does not measure sensor networks or mobile apps alone. It also incorporates indicators of inequality and human development, which reflects a shift in how the concept is understood: it is no longer exclusively a technology infrastructure project, but a governance framework that seeks to translate data into better services for the population. That distinction is central at regional forums, where officials and specialists insist that technology is a means, not an end in itself.
How the Topic Reached Latin America's Agenda
The concept gained global momentum starting in 2011, when Barcelona organized the first edition of the Smart City Expo World Congress, today the world's benchmark event for urban innovation. The 2025 edition, held in November at the Gran Via venue of Fira de Barcelona, brought together more than 27,000 attendees from 143 countries and 1,190 exhibitors under the motto The Time for Cities, according to the official Fira de Barcelona report. The event's director, Ugo Valenti, noted that artificial intelligence has become a central tool not only for the operational efficiency of cities, but for accelerating their transformation.
Latin America has its own regional version of the congress. The Smart City Expo LATAM Congress, organized by the company PRONUS together with Fira Barcelona, has been held in Puebla for more than a decade. Its 2026 edition, the 11th, took place from June 2 to 4 and brought together representatives of more than 300 cities and 40 countries, according to u-GOB's coverage. The forum was organized around five axes: digital innovation, equitable society, sustainable environment, urban mobility, and economic prosperity.
There, Mexico's Secretary of Economy, Lizzeth Pacheco, argued that a truly smart city uses innovation as a bridge to equity, competitiveness, and human development, an idea that sums up the rhetorical shift of recent years: from the sensor-laden city to the people-centered city.
That shift is also reflected in financing. On September 14, 2026, at a forum held in Santiago de Chile, the Development Bank of Latin America and the Caribbean (CAF) announced that it will allocate 12,000 million dollars over the next five years to digital transformation projects in the region, including connectivity, data centers, processing infrastructure, and cybersecurity. Its executive president, Sergio Díaz-Granados, said that no country in Latin America and the Caribbean can shape on its own the rules that will define the future of artificial intelligence.
Why It Matters for Mexico
Mexico holds a particular position on this regional map. Mexico City appears at 119th in IMD's global ranking, just one step below Medellín, the best-positioned Latin American city, which places it among the three most advanced digital capitals in the region. Puebla, for its part, has consolidated its status as the permanent host of Latin America's leading specialized congress, an annual meeting point for mayors, companies, and international organizations that discuss urban policy.
International financing also has a concrete Mexican component. Of the 2,785 million dollars that CAF allocated over the past six years to connectivity and digital infrastructure projects in the region, Mexico received 451 million dollars, the third-highest amount after Colombia (511 million) and Argentina (458 million), according to bank figures reported by DPL News. That financing was used to expand internet access, technology training, and the digitization of public services, and it benefited 75.8 million people in the region.
Mexican institutions such as the federal Ministry of Economy and state governments have participated directly in the forums where the regional agenda is set. Secretary Lizzeth Pacheco's remarks in Puebla reflected that official interest in linking the smart cities discussion to social equity goals, beyond the adoption of technology alone.
For Mexico, the challenge is no different from that of the rest of the region: urban infrastructure must absorb demographic pressure, mobility saturation, and greater energy demand without relying exclusively on federal resources, which explains why financing from multilateral banks such as CAF occupies a central place in the conversation.
What Comes Next
In the short term, two calendars will set the pace of the conversation. The Smart City Expo World Congress will return to Barcelona from November 3 to 5, 2026, with expectations of surpassing the 27,000 attendees of the previous edition and a program organized around eight thematic axes, including enabling technologies, energy, mobility, and governance, according to Smart City Expo itself. In the region, the Smart City Expo LATAM Congress has already established its pattern of an annual edition in Puebla, independent of the European host.
On the financial front, CAF's announcement of 12,000 million dollars for the next five years will serve as a benchmark for measuring how much of that capital actually reaches urban projects, versus other uses such as corporate data centers or enterprise cybersecurity. The institution said it will seek to mobilize additional resources together with financial allies and the private sector, so the real size of investment in cities will depend on agreements that have not yet been announced in detail.
It will also be relevant to watch whether the IMD ranking, updated every year, reflects movement by Latin American cities in its next edition, and whether Puebla, Mexico City, or Medellín manage to climb positions relative to other capitals in the region.
Frequently Asked Questions
**What is a smart city?** It is an urban management model that uses sensors, connectivity, and data to optimize transport, energy, security, and public services. The IMD Smart City Index 2025 also incorporates indicators of inequality and human development, not just technology infrastructure.
**Which is the smartest city in Latin America according to the global ranking?** Medellín, at 118th in the IMD Smart City Index 2025, the highest position among the Latin American cities evaluated. It is followed by Mexico City (119) and Santiago de Chile (120).
**What is the Smart City Expo LATAM Congress?** It is the regional edition of the smart cities congress, organized by PRONUS and Fira Barcelona in Puebla for more than a decade. Its 11th edition took place from June 2 to 4, 2026, and brought together more than 300 cities from 40 countries.
**How much will CAF invest in digital transformation in the region?** The Development Bank of Latin America and the Caribbean announced on September 14, 2026, that it will allocate 12,000 million dollars over the next five years to connectivity, data centers, processing infrastructure, and cybersecurity in Latin America and the Caribbean.
This article was written with artificial intelligence assistance based on verified sources and reviewed by a human editor before publication.