Green hydrogen fertiliser developer Atome expects clarity on new power tariffs for its flagship $665m Villeta project in Paraguay by early September, as Paraguay reviews electricity prices for large industrial users.
It follows the government’s decision to revoke two decrees setting out preferential power tariffs and contract terms for a new power purchase agreement (PPA) negotiated between Atome and state utility ANDE after the project reached financial close.
In its first update since the end of July, Atome said President Santiago Peña’s government has set up a working group to review ANDE and establish new tariffs aimed at attracting investment.
“It has been requested by the government…that clarity of such tariff levels be achieved by the first part of September,” Atome said.
The change comes as demand for Paraguay’s hydropower grows, particularly from AI and data centre projects, according to ANDE.
However, Atome said ANDE still views it as an “existing customer” due to the original PPA for the Villeta project being signed in 2022, with the 145MW of power agreed and reserved included in ANDE’s plans through 2050.
The president of ANDE, who was in office when the decrees were revoked, has since resigned and been replaced.
“Atome stands apart from other prospective power users, not only because its power requirement had long been part of ANDE’s power plans extending to 2050, but also because Villeta is the largest industrial foreign investment in the history of Paraguay,” the company said, highlighting the “ready-to-build” status of the development.
The events have created dramatic uncertainty for the project, viewed as a lighthouse development for green hydrogen-based fertiliser production.
Due online in late 2029, the project had secured $420m of debt funding and $244m in equity from institutions including the United Nations, European Investment Bank, International Finance Corporation, and Hy24.
It is set to supply the fertilisers to Yara under a 10-year offtake deal.
The roughly $30/MWh tariff for 15 years set out under the scrapped decrees became a cornerstone of the project’s financing.
Atome said it continues to engage with parties and continues work with its engineering, procurement, and construction contractor Casale to “maintain the original project schedule.”
