Atome's $665 Million Paraguay Fertilizer Plant Investment Faces 'Tariff Favoritism' Allegations

British firm Atome is set to invest $665 million in Paraguay to establish a green fertilizer plant, a project it touts as a major step toward national industrialization and job creation. The company promises substantial annual revenue for the state electricity company, ANDE, and thousands of jobs under the "Energy to X" regime. However, the deal is mired in controversy, with accusations of political favoritism and the creation of a bespoke tariff structure for Atome.

Atome has responded to criticism by releasing a report detailing the project's energy impact. The plant will operate as a base industrial load of 125 MW, representing less than 2% of Paraguay's hydroelectric power. It will connect at 220 kV to ensure minimal technical losses for ANDE, a move the company states will facilitate electrical planning and provide stable income. Atome projects annual revenues exceeding $30 million for the state utility. The agreement also includes direct investments by Atome for upgrades at the Buey Rodeo Substation. To safeguard finances, the deal establishes a tariff in U.S. dollars, eliminating exchange rate risk for ANDE over the plant's 25-year lifespan.

The core of the business involves using clean electricity and water from the Paraguay River to produce green hydrogen and ammonia, which will be used to manufacture nitrogenous fertilizer (CAN). Atome describes this initiative as a "green industrialization platform, skilled employment, and productive chain." The company emphasizes that imported technology will remain in Paraguay as national productive capacity. Currently, Paraguay imports 98-100% of its fertilizers, leading to a significant outflow of foreign currency. Local production is expected to save approximately $700 million annually and reduce the country's exposure to international price shocks.

With an estimated annual production of 260,000 tons, the plant aims to supply the Mercosur market. A 10-year contract is already secured with distributor Yara, projecting annual exports above $120 million. The project also promises significant job creation, with an estimated 4,100 direct and indirect jobs during construction and an additional 1,290 during factory operation. Furthermore, Atome anticipates stimulating the domestic economy through around $200 million in local contracts for civil works, metal mechanics, and logistics, alongside annual operating expenses exceeding $42 million.