Government of Paraguay grants Free Zone regime for the first advanced biofuel plant in the southern hemisphere
São Paulo, January 24, 2020 - The government of Paraguay today published a decree by President Mario Abdo Benítez granting a Free Zone regime for the Omega Green project, the first advanced biofuel plant in the southern hemisphere, to be built in the country by the company ECB Paraguay (member of the ECB Group), led by Brazilian entrepreneur Erasmo Carlos Battistella. The Free Zone guarantees the maintenance of the legal conditions of the project for a period of 30 years, reinforcing the legal security for investment in the country. The decision of the Paraguayan government will still contribute to the economic competitiveness of the project and will reduce the cost of its construction. The decree was signed on January, 20.
The presidential decree highlights that the concession of Zona Franca is justified for the following reasons:
1. “Boost foreign trade” in the country, as all its production will be exported;
2. Add value to raw materials produced in Paraguay, such as animal fats, vegetable oils and residual oils;
3. It will be an important source of job creation and will bring “cutting edge technology” to Paraguay;
4. The complex was considered “of national interest” due to its importance and social and economic scope for Paraguay. It is the largest private investment in a single project in the country`s history and will bring gains of more than $ 8 billion in 10 years for the economy.
In December, Abdo Benítez was received by U.S. President Donald Trump at the White House. Upon leaving the meeting, he told the press that he talked to the American president about the Omega Green project, noting that with the implementation of the project his country will be at the forefront of the green economy worldwide.
In addition to the Free Zone concession, the Omega Green Project has made further progress in recent days. On January 8, reaffirming the Paraguayan government`s support for the project, President Abdo Benítez signed a decree authorizing the EBC Group to buy land in the Villeta district for the installation of the biofuel plant. The measure was necessary because the land is in a Security Zone, on the banks of the Paraguay River, in the region bordering Argentina. The project even received a favorable decree for its installation by the Ministry of Defense, which recommended President Abdo Benítez to sign the authorization.
Another important step taken by Omega Green at the beginning of the year was the completion of the environmental impact study, in accordance with the requirements and technical analysis required by the Ministry of the Environment and Sustainable Development of the neighboring country. The study was prepared by some of the leading experts on the subject in Paraguay, following the most advanced international parameters to guarantee the low environmental impact of the project. The environmental impact report (RIMA) is under public consultation until the end of January.
“The signing of the Zona Franca concession, together with the approval of the purchase of the land for the installation of the company 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. We took very important steps and we are going very well ”, says businessman Erasmo Battistella, who is waiting for the approval of the project`s environmental licensing soon.
The Omega Green complex will generate 3,000 direct jobs in the construction phase and about 2,400 direct and indirect jobs when it goes into operation. The projections indicate an estimated increase of US $ 8 billion in the gross domestic product (GDP) of Paraguay in 10 years. Classification as a project of national interest, due to its importance and scope, is highlighted in the texts of the two presidential decrees.
With an estimated investment of US $ 800 million, the plant will produce renewable diesel and renewable aviation kerosene, biofuels whose contribution in the process of transition to the decarbonization economy should increase exponentially. The production will be exported to Europe and North America.
Launched in February 2019, the Omega Green project is the largest private investment in the history of Paraguay and includes the construction of the first advanced biofuels plant in the Southern Hemisphere. The Villeta region has a strategic position, as it is a distant port and industrial district only 45 kilometers from Asunción. It will produce renewable diesel or HVO, acronym in English for hydrodreated vegetable oil, and renewable aviation kerosene, or SPK, in English, fuels that emit less greenhouse gases and that will be exported to countries that sign the Paris Agreement, such as the United States, Canada and members of the European Union.
The Barclays and UBS banks are responsible for the financial structuring of the project. Project suppliers include Honeywell UOP, owner of the renewable fuel refining technology UOP Renewable Jet Fuel Process ™, Crown Iron Works, an American technology company that produces advanced biofuels from the processing of vegetable and non-animal fats edible, and Acciona, a Spanish company that is among the largest in the world in the area of engineering and construction.
“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. Omega Green will export its production, bringing economic, environmental and social benefits to the country ”, says Erasmo Battistella.
The works are expected to start in the second half of 2020 and the execution period is estimated at 30 months. More than 20,000 smallholder families are expected to benefit from certification programs for the supply of raw materials.
The complex installed in Paraguay will be the third world plant for advanced biofuels, with a production of 20,000 barrels per day of renewable diesel and kerosene. With the investment, the country will become one of the major players in the global biofuels market.
About the ECB Group
Founded in 2011 by businessman Erasmo Carlos Battistella, the ECB Group is a holding company with investments and strategic holdings in agroenergy companies, operating throughout the chain in areas such as biodiesel production and electricity generation using renewable sources. The investment portfolio includes participation in companies such as BSBIOS, R.P. BIO SWITZERLAND SA, ECB GROUP PARAGUAY and ECB GROUP BRASIL.
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