- European Investment Bank commits up to $95 million to develop a green hydrogen fertiliser plant in Paraguay producing 260,000 tonnes annually.
- Project will replace fossil based hydrogen in fertiliser production, cutting emissions in one of agriculture’s hardest-to-abate sectors.
- Plant expected to generate more than 5,000 jobs and strengthen fertiliser supply across the Mercosur region.
Paraguay Emerges as Green Hydrogen Hub for Fertiliser Production
The European Investment Bank’s development arm, EIB Global, has committed up to $95 million in financing for a green hydrogen fertiliser plant in Paraguay, backing one of Latin America’s most ambitious clean industrial projects and expanding Europe’s Global Gateway strategy in the region.
The Villeta Green H₂ Fertiliser Plant, developed by ATOME PLC, will produce roughly 260,000 tonnes per year of low-carbon calcium ammonium nitrate fertiliser using hydrogen derived from Paraguay’s fully renewable electricity system. The project positions Paraguay to become a key supplier of low-carbon fertiliser across South America while demonstrating the commercial viability of green hydrogen in heavy industry.
Located near the strategic Parana–Paraguay waterway and within reach of major agricultural markets in Brazil and Argentina, the plant is designed to serve the Mercosur region, currently the world’s largest fertiliser import market. By producing fertiliser domestically using renewable energy, the project aims to cut emissions in nitrogen fertiliser production while improving regional supply security.
Decarbonising a Hard-to-Abate Industrial Sector
Fertiliser production relies heavily on hydrogen produced from fossil fuels, making the sector one of the most carbon-intensive parts of global agriculture. By replacing fossil-based hydrogen with green hydrogen produced from renewable electricity, the Villeta facility seeks to transform that process.
Once operational, the plant is expected to become one of the first industrial-scale green hydrogen fertiliser facilities outside the European Union and, according to project developers, the largest of its kind globally at the time of commissioning.
The project is also designed to support regional agricultural productivity by stabilising fertiliser supply. Latin America’s farmers have faced increasing volatility in fertiliser markets in recent years due to geopolitical disruptions and supply chain pressures. Localised production could reduce reliance on imports while lowering the carbon footprint of agricultural inputs.
Global Gateway Financing Coalition
The EIB financing will be structured under a non-recourse project finance model alongside a group of international development finance institutions, including the International Finance Corporation, IDB Invest, the Dutch development bank FMO and the Green Climate Fund.
A long-term power purchase agreement with Paraguay’s state-owned electricity utility ANDE will supply the facility with renewable electricity, leveraging the country’s abundant hydropower capacity.
Construction and operations are expected to generate more than 5,000 direct and indirect jobs, contributing to industrial diversification in Paraguay’s economy while establishing a regional clean technology hub.
“Supporting one of the most advanced green hydrogen projects in Latin America demonstrates the EIB’s commitment to accelerating the global clean transition. This investment reinforces our role in fostering sustainable innovation globally while contributing to resilient and inclusive development in Paraguay and the Mercosur region,” said Ioannis Tsakiris, EIB Vice-President.
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Strategic Partnership Between Europe and Latin America
The project forms part of the European Union’s Global Gateway initiative, a broader strategy designed to mobilise sustainable infrastructure investment and strengthen economic partnerships with emerging markets.
For the EU, backing industrial-scale green hydrogen projects abroad expands supply chains for clean technologies while advancing diplomatic and economic ties with Latin America.
For Paraguay, the development offers a pathway to leverage its renewable energy resources for higher-value industrial production, moving beyond traditional commodity exports.
“Through this Global Gateway investment, the EU strengthens its partnership with Paraguay and shows its commitment to the sustainable future and diversification of the Paraguayan economy, helping to promote the country as a leader in the region in green hydrogen,” said Katja Afheldt, EU Ambassador to Paraguay.
Clean Fertiliser as a Commercial Opportunity
For ATOME PLC, the Villeta plant represents a test case for whether green fertiliser can compete economically with conventional production methods.
“We greatly value EIB’s support for this landmark project, which ATOME has pioneered from the ground up. Our Villeta plant enables industrial-scale fertiliser production free from fossil fuel dependence — a critical advance for global food security and the long-term profitability of agricultural supply chains. Together with the financial coalition we have built, EIB’s backing proves that green fertiliser is not just environmentally essential, but a compelling and sustainable business opportunity,” said Olivier Mussat, CEO of ATOME PLC.
For investors and policymakers, the project highlights how climate finance is increasingly moving beyond pilot projects toward large-scale industrial applications. As global demand grows for both low-carbon agricultural inputs and secure fertiliser supply, initiatives like Villeta illustrate how renewable energy resources can be converted into strategic industrial assets.
In a global economy searching for pathways to decarbonise heavy industry while safeguarding food production, Paraguay’s green hydrogen fertiliser plant offers a model for linking climate ambition with agricultural resilience.
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