Uruguay to launch first green hydrogen project for freight transport with IFC backing

The International Finance Corporation will provide $20mn in
green financing for Uruguay’s first green hydrogen project, aimed
at decarbonising freight transport in a development the World Bank
Group member says could create tens of thousands of jobs across the
region.

The IFC announced on December 16 it would fund the Kahirós
project alongside Spain’s Santander Group, marking the
corporation’s first global investment in green hydrogen
infrastructure. The initiative will integrate solar energy,
hydrogen production and electric transport systems to power
specially designed lorries transporting timber to pulp mills in the
South American nation.

Set to become operational by end-2026 in the city of Fray Bentos
in northwestern Uruguay, the project will feature a 3.9 megawatt
solar installation and produce hydrogen to fuel six heavy goods
vehicles serving Montes del Plata, one of the country’s principal
pulp producers. Total investment is estimated at $38.6mn.

‘Uruguay has made remarkable strides in expanding renewable
energy sources, and this project represents an important step
towards decarbonising hard-to-reach sectors such as
transportation,’ said Alfonso García Mora, IFC Vice President for
Europe, Latin America and the Caribbean, highlighting the
initiative’s potential for replication across the region.

The Kahirós consortium comprises Uruguayan firms Ventus, Fidocar
and Fraylog, alongside Santander Group, with additional backing
from the United Nations Renewable Energy Innovation Fund.

Proponents say the project could establish foundations for a
broader green hydrogen industry with the potential to generate more
than 30,000 direct jobs by 2040, positioning Uruguay as a regional
leader in clean energy solutions for transport.

Gustavo Trelles, country head of Santander Uruguay, said IFC’s
participation confirmed the project’s strength and international
credentials.

Uruguay has emerged as a regional renewable energy leader, with
wind and solar power comprising a substantial portion of its
electricity generation.

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