Paraguayan Government grants ‘free zone regime’ for Omega Green biofuel plant

The government of Paraguay has recently granted a Free Zone regime for the Omega Green project, which is being touted as the first advanced biofuels plant in the southern hemisphere.

The facility, which will be built by ECB Group at an estimated cost of $800 million (€725.7 million), will produce renewable diesel and renewable aviation kerosene. It is expected that the advanced biofuels produced will be exported to Europe and North America.

The Free Zone guarantees the maintenance of the legal conditions of the project for 30 years, reinforcing the legal conditions for investment in Paraguay. The government’s decision also contributes to the competitiveness of the project, according to ECB Group, and will reduce construction costs.

Within the decree, President Mario Abdo Benítez highlighted key reasons for the justification of a Free Zone for the project. These included claims that the advanced biofuel facility will: boost foreign trade in the country; add value to raw materials produced in the country, such as animal fats and vegetable oils; and create jobs and bring ‘cutting edge technology’ to Paraguay.

The project was also considered to be ‘of national interest’, due to its importance and social and economic scope for Paraguay. It is expected to be the largest private investment in a single project in the country’s history, and will bring economic gains of more than $8 billion (€7.3 billion) to Paraguay within ten years.

In addition to the Free Zone concession, in early January President Benítez signed a decree authorising the ECB Group to buy land in the Villeta district of Paraguay for the construction of the biofuel plant.

The environmental impact study has also recently been concluded, in accordance with requirements and technical analysis required by the country’s Ministry of the Environment and Sustainable Development. The report is under public consultation until the end of January 2020.

“The signing of the Zona Franca regime concession, together with the approval of the purchase of the land for the installation of the plant and the conclusion of the environmental impact study demonstrate that our project is rigorously and with great success fulfilling the schedule we defined at the beginning,” said Erasmo Battistella, founder of the ECG Group. “We took very important steps and we are going very well.”

The Omega Green facility is expected to generate 3,000 direct jobs during construction of the plant, and around 2,400 direct and indirect jobs once operational. The facility will have an initial production capacity of 20,000 barrels per day of renewable diesel and kerosene.

“Our commitment to Paraguay and the government is that we are coming to the country not to compete, but to build together and add value to the raw materials produced here,” added Battistella. “Omega Green will export its production, bringing economic, environmental and social benefits to the country.”

Construction is expected to begin in the second half of 2020 and will take around 30 months to complete. More than 20,000 smallholder families in Paraguay are expected to benefit from certification programmes for the supply of raw materials.