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Paraguay's $665 Million Fertilizer Plant Project at Risk Over Electricity Tariff Dispute
🇵🇾 Paraguay /Economy & Trade

Paraguay's $665 Million Fertilizer Plant Project at Risk Over Electricity Tariff Dispute

From ABC Color · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Atome Paraguay's $665 million green fertilizer plant project is at risk if the state electricity company ANDE does not approve a previously agreed-upon tariff of $30 per megawatt-hour.
  • Internal ANDE sectors and a union oppose the fixed tariff, arguing the real technical cost is $44/MWh and that selling at a lower rate would harm public finances.
  • The project's cancellation would jeopardize thousands of jobs, Paraguay's recent investment grade status, and its international credibility, according to Atome's president.

The future of Atome Paraguay's $665 million green fertilizer plant hangs precariously in the balance. James Spalding, the company's president, has confirmed that the project will be canceled if the state electricity company, ANDE, fails to uphold a previously agreed-upon fixed tariff of $30 per megawatt-hour (MWh).

Yes. We are already at risk.

— James SpaldingSpalding's categorical response when asked if the investment would be canceled if the deal at $30/MWh was not closed.

This indecision threatens not only thousands of potential jobs but also Paraguay's recently achieved investment grade status and its international credibility. The controversy erupted when internal factions within ANDE, notably the Sitrande union, voiced opposition to the supply contract. They argue that the actual technical cost of electricity is $44/MWh, and selling it for less would result in significant losses for the state.

Spalding expressed bewilderment at the sudden shift in terms, especially after international bodies had already approved financing and the plant's location in Villeta. He stated unequivocally that the investment is at risk if the $30 deal isn't finalized. He also refuted claims that the contract would harm ANDE financially, pointing out that energy supply would only begin in 2029 when production costs are expected to decrease as the Itaipú debt is amortized. "This contract does not mean patrimonial damage for ANDE, in any way. Officially, ANDE said last year its cost was $27 per MWh. Today, with $30, ANDE is not losing money," Spalding argued.

This contract does not mean patrimonial damage for ANDE, in any way. Officially, ANDE said last year its cost was $27 per MWh. Today, with $30, ANDE is not losing money.

— James SpaldingSpalding's argument that the agreed-upon tariff is not financially detrimental to the state electricity company.

Furthermore, Spalding clarified that Atome would not use ANDE's distribution network. Instead, the company will invest $12 million to upgrade the Buey Rodeo Substation to draw energy at high voltage. The project already has substantial international financial backing, including $420 million in loans from the Inter-American Development Bank and $245 million in capital from European funds, secured during the IDB assembly in Asunción. Spalding questioned the difficulty of explaining these domestic hurdles to international investors, asking, "I don't understand. And when I have to explain this to the English, Germans, and French, it's not easy. What is happening?"

I don't understand. And when I have to explain this to the English, Germans, and French, it's not easy. What is happening?

— James SpaldingSpalding expressing his bewilderment and frustration over the domestic obstacles to explaining the situation to international investors.
DistantNews Editorial

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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