Uruguay is planning to launch an associated bidding round in the second half of the year for investment incentives spanning electricity supply and grid connection, as well as access to state oil firm Ancap‘s infrastructure, land and technical support services.
Uruguay is seeking parties interested in investing in a production facility and a fleet of hydrogen-powered trucks and buses.
Some 600 parties have entered the dataroom and more than 30 private sector players are working in it, Paganini said, adding that associated schemes have been put forward.
“Investors have come with transport projects; there are other types of ideas, some linked directly to exporting, some to different applications: energy for green fertilizers, energy for fuel for fishing fleets,” Paganini said during an economic forum organized by the Uruguay-Germany chamber of commerce.
The proposals demonstrate that Uruguay must view green hydrogen as a domestic energy source and not just an export product, he said.
Indeed, for the domestic market, the country seeks to eventually produce green hydrogen to substitute liquid fuels in the heavy transport sector and to make green fertilizers.
Paganini (pictured) said that the advantages of Uruguay as an investment target are institutional stability and legal certainty – linked to competitive project financing costs – as well as its strong renewables potential, particularly offshore wind.
Uruguay sees the pilot project, which targets the domestic market, as the first step on a path leading to the development of an export industry focused on green hydrogen derivative green ammonia, seen as key to reducing global carbon emissions from shipping and other forms of bulk transport.
Uruguay’s export industry strategy involves dangling incentive carrots to pull in foreign investment to build out its infrastructure – instead of adopting a state investment-driven model. Paganini said a measured, step-by-step approach was vital to develop the sector. He added that the country would provide investors that hold offtake contracts with the requisite support, but that the private sector would assume commercial risk. “I’ve said this to everyone who has come, and nobody has left so far,” Paganini said.
Ancap chairman Alejandro Stipanicic recently told BNamericas that a long-term goal was to develop a maritime production hub geared to the export market.
A pilot initiative, to make e-methanol using green hydrogen and dubbed Hari Oni, has received 8.2mn euros (US$9.8mn) in German funding. Involving German company Siemens and other stakeholders, the plant is due to enter production in 2022 and gradually ramp up output.
Germany created a national hydrogen strategy in 2020 that includes US$2bn for international cooperation schemes. Seen as a major future purchaser of green hydrogen and derivative projects, Germany – without capacity to fully meet projected domestic demand – has South America and North Africa on its radar as potential supply partners.