Five multilateral development finance institutions have closed a $420 million debt package for ATOME PLC's Villeta Green H2 Fertiliser Plant in Paraguay, clearing the way for construction of what will become the world's largest dedicated green hydrogen fertilizer facility. The deal, signed on March 12, 2026, with the European Investment Bank confirming its $95 million commitment the following day, marks a landmark moment for green hydrogen procurement in Latin America and the global fertilizer supply chain.
The Deal: Five Lenders, One Plant
The Villeta project has assembled a financing coalition rarely seen for a single industrial facility in South America. IDB Invest acted as global financial coordinator and largest single lender, structuring a non-recourse project finance package that brings together five institutions:
- IDB Invest: approximately $156 million, including a $95 million senior loan
- FMO (Dutch Entrepreneurial Development Bank): up to $200 million
- IFC (International Finance Corporation): up to $100 million
- EIB Global (European Investment Bank): up to $95 million
- Green Climate Fund: $50 million in concessional funding
Around 25% of the total debt has been provided on concessional terms — below-market interest rates that materially reduce the project's cost of capital. On the equity side, Hy24, a specialist low-carbon hydrogen investor, committed $115 million as anchor equity investor in February 2025.
The total project investment exceeds $650 million, making it one of the largest single greenfield industrial investments in Paraguay's history.
What the Villeta Plant Will Build
The facility, located near the town of Villeta along the Paraná-Paraguay waterway, will use 145 megawatts of baseload renewable hydroelectric power from the Itaipu dam — one of the world's largest hydroelectric installations — to produce green hydrogen through electrolysis. That hydrogen is then combined with nitrogen to create zero-carbon ammonia, which is converted into calcium ammonium nitrate (CAN), a widely used nitrogen fertilizer.
At full capacity, the plant will produce approximately 260,000 tonnes of CAN per year, displacing fossil fuel-based fertilizer imports across the Mercosur region. ATOME estimates the facility will offset up to 12.5 million tonnes of CO2 over its operational lifespan.
Key technical and commercial milestones already secured include:
- EPC contract: Swiss engineering firm CASALE signed a fixed-price $465 million lumpsum contract in April 2025
- Offtake agreement: Yara International, the world's largest fertilizer company, has committed to purchase 100% of the plant's output
- Power supply: A long-term power purchase agreement with Paraguay's state utility ANDE secures 145 MW of renewable electricity
- Operations target: 2028
The project is classified as Environmental Category A by IDB Invest, reflecting potentially significant environmental and social impacts that require comprehensive assessment — a signal that the project will generate substantial environmental consulting and monitoring contracts.
Why This Matters for the Fertilizer Market
The Mercosur region — Brazil, Argentina, Paraguay, and Uruguay — imports approximately 30 million tonnes of nitrogen fertilizer annually, almost entirely derived from fossil fuels. Brazil alone is the world's fourth-largest fertilizer consumer, importing over 80% of its needs.
The Villeta plant addresses three structural vulnerabilities simultaneously:
- Import dependence: Regional fertilizer supply chains remain heavily exposed to geopolitical disruptions. The ongoing Strait of Hormuz crisis has already demonstrated how energy supply shocks ripple through commodity markets, including fertilizer prices.
- Carbon intensity: Conventional ammonia production accounts for roughly 1.8% of global CO2 emissions. Green hydrogen-based production eliminates these emissions entirely when powered by renewable electricity.
- Price volatility: By establishing a local, subsidy-free production base, the project creates a price anchor for regional fertilizer procurement that is insulated from natural gas price fluctuations.
This is not a pilot project or demonstration facility. With 260,000 tonnes per year and a binding offtake with Yara, the Villeta plant enters the market as a commercially competitive operation from day one.
Procurement Implications
The $650 million project creates procurement opportunities across multiple contract types and sectors, spanning construction, specialized industrial equipment, professional services, and long-term operational contracts.
Construction and Civil Works
The CASALE EPC contract covers the core industrial facility, but significant ancillary construction procurement will be required:
- Site preparation and earthworks along the Paraná-Paraguay waterway
- Road access and logistics infrastructure connecting to national highways
- Worker housing and temporary construction facilities for an estimated 2,000+ construction workers during peak periods
- Utilities connections, water treatment, and effluent management systems
- Warehouse and storage facilities for finished fertilizer products
Specialized Equipment and Supplies
Green hydrogen production at this scale requires highly specialized equipment procurement:
- Electrolyzers: 145 MW of electrolyzer capacity represents one of the largest single-site deployments in Latin America
- Ammonia synthesis units: High-pressure reactors and heat exchangers for the Haber-Bosch process
- Fertilizer processing equipment: Prilling towers, granulation equipment, and packaging lines for CAN production
- Power infrastructure: Transformers, switchgear, and grid connection equipment for the 145 MW power supply
- Storage and handling: Ammonia storage tanks, fertilizer silos, and conveyor systems
- Environmental controls: Emissions monitoring, water recycling, and waste treatment equipment
Consulting and Professional Services
The project's Category A environmental classification and multi-lender structure generate extensive consulting requirements:
- Environmental and social impact assessment (ESIA) monitoring and compliance reporting
- Independent engineering reviews for each of the five lending institutions
- Lender's technical advisors and independent environmental consultants
- Legal advisory services across Paraguayan, international, and multi-jurisdictional frameworks
- Carbon accounting and verification services for the 12.5 million tonne CO2 displacement claim
- Health and safety management systems for hydrogen handling operations
Operational and Maintenance Contracts
Once operational in 2028, the plant will require ongoing service contracts:
- Electrolyzer maintenance and component replacement programs
- Fertilizer quality testing and certification services
- Logistics and transportation contracts for 260,000 tonnes annual output to regional markets
- Digital monitoring and process optimization platforms
- Training programs for specialized hydrogen and ammonia handling
Countries and Regions Affected
The project's impact extends well beyond Paraguay:
- Brazil: As the primary destination market for CAN exports via the Paraná-Paraguay waterway, Brazilian agricultural procurement will be directly affected. Brazil's $12 billion annual fertilizer import bill creates natural demand for a regional supplier.
- Argentina: The Mercosur trade framework provides duty-free access for Paraguayan fertilizer exports. Argentina's agricultural sector — the country's largest foreign exchange earner — stands to benefit from diversified fertilizer sourcing.
- Uruguay: As a Mercosur member with significant agricultural output, Uruguay gains access to a nearby low-carbon fertilizer source.
The European Union is also strategically engaged through EIB Global's participation. The project is a flagship initiative under the EU Global Gateway strategy, designed to strengthen the EU-Mercosur partnership and demonstrate that European development finance can compete with other international investors in Latin America's green transition.
For contractors based in EU member states, the EIB financing component typically requires compliance with EIB procurement guidelines, which mandate international competitive bidding for contracts above defined thresholds.
What This Means for Contractors
Companies looking to participate in the Villeta project or similar green hydrogen opportunities should consider several practical steps:
- Monitor IDB Invest and EIB procurement notices: Both institutions publish procurement opportunities through their standard platforms. IDB Invest's procurement is governed by its Procurement Policy for Investment Projects, while EIB follows its Guide to Procurement.
- Build green hydrogen credentials: Electrolyzer manufacturers, ammonia specialists, and environmental consultants with hydrogen experience will have a competitive advantage as the green hydrogen sector scales from pilot to industrial deployment.
- Watch for replication projects: ATOME has indicated that the Villeta model could be replicated across other renewable energy-rich countries. Paraguay's success — if delivered on time and budget — will likely trigger similar projects in Chile, Colombia, and East Africa.
- Prepare for Category A requirements: The strict environmental and social standards required by five simultaneous multilateral lenders create opportunities for specialized E&S consulting firms, auditors, and monitoring service providers.
Relevant energy and environment tenders are already available on BidsFactory, including opportunities from IDB Invest and the World Bank Group.
Looking Ahead
The Villeta project is scheduled to reach final investment decision and begin full construction mobilization in the coming months, with commercial operations targeted for 2028. The CASALE EPC contract is already signed, and with the $420 million debt package now closed, the remaining step is equity close.
The broader green hydrogen sector in Latin America is accelerating. Chile, Colombia, and Brazil have all published national hydrogen strategies, and the region's abundance of renewable energy — hydroelectric, solar, and wind — positions it as a potential global leader in green hydrogen exports.
For procurement professionals, the Villeta project represents a template: renewable energy feeding into industrial-scale chemical production, financed by multilateral institutions, and anchored by long-term commercial offtake. More projects like this will follow.
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