Atome Energy advances green hydrogen projects in Paraguay as it eyes tax-free status
() , a green hydrogen company with projects in Latin America and Europe, updated markets on its Paraguay operations.
The company signed a 145 MW power purchase agreement (PPA) for its Phase 1 Villeta project, an increase from the previous 120 MW agreement, showcasing Paraguay's push to become a global leader in green industries under newly elected President Santiago Pena. The enlarged PPA will give Atome the headroom to deliver the 120 MW project on a 24/7 constant baseload basis. The extra power will be immediately available from the nearby Buey Rodeo substation, recently constructed 300m away.
In addition to the Villeta PPA, Atome entered into a pre-PPA agreement for 300 MW of power for its Phase 2 Paraguay project at Yguazu where there is a newly built landmark 1 GW substation going through initial testing. As with Villeta, the 24/7 power will be generated by the 14 GW Itaipu Binacional hydroelectric dam, the second-largest in the world, which Paraguay shares with Brazil. The pre-PPA outlines specific studies required by the Paraguayan National Power Company (ANDE) before the formal PPA's entry, and Atome has initiated procurement work to complete these studies before end of 2023.
Furthermore, Atome is on track to obtain tax-free zone status for its Villeta project, subject to approval after completion of an Environmental and Social Impact Assessment study (ESIA). The project's positive environmental impact, conducted by independent consultant JGP, has been partially funded by IDB Invest, a major funding source for projects in Latin America and the Caribbean. Pending government and presidential approval, Atome aims to achieve certified tax-free zone status by the end of 2023, which should provide significant benefits for the Villeta project, including tax-free importation of goods and equipment, VAT exemption on goods and services, and favourable tax rates.
Atome said it has received several written expressions of interest from international players for offtake of its Phase I Villeta production on a long-term basis, indicating robust demand for the company's green fertiliser, marketed under the "Green-N" label and expected to commence production by the end of 2025.
Progress towards the Final Investment Decision (FID) for the Villeta project is ongoing, with engineering, procurement, and construction discussions with contractors, as well as collaboration with Urbas, Casale, and AECOM as project manager. Atome should meet its FID goal in Q4 2023.
View from Vox
In summary, Atome continues to progress through its Paraguay projects at pace, hitting significant milestones along the way. The 145 MW PPA for Atome's Villeta green project is the single largest PPA granted to any industrial user in the history of Paraguay. While the year-end FID target for Villeta is ambitious, partner work is progressing rapidly enough to ensure it is reached.
The company has seen significant market demand for its products, driven by decarbonisation efforts across the globe. More specifically, the surge in hydrocarbon and fertiliser prices, along with the international emphasis on green commodities and supply security, have created a favourable market for Atome's planned production.
According to a recent report by the Hydrogen Council and McKinsey & Co, by 2050 clean hydrogen could abate 7 gigatons of CO2 emissions annually, which is c. 20% of human-generated emissions. Hydrogen will be a particularly crucial source of energy in the 2020-2040 period, providing baseload back-up in the event of insufficient renewable generation.
Fertiliser, agriculture, and food companies in particular face mounting pressure to lower their carbon emissions while satisfying the ever-increasing demands of a growing global population. In 2021 alone, the ammonia industry contributed more than 450 million tons of CO2 eq to global emissions. Transforming nitrogen-based fertilisers into environmentally friendly alternatives is seen as a rapid and effective approach for these companies to achieve their climate targets and ensure supply stability.
As a result, the green fertiliser sector is anticipated to emerge as one of the fastest-growing industry segments of the decade, with the market projected to reach a value of US$ 2,145.73 million by 2030, and rise at a CAGR of 4.5%.
Follow News & Updates from Atome Energy:
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.