On Monday, August 4, 2025, a Korean delegation headed by Seo Gyu Yoon, CEO and President of Cheong A Chemical Co., Ltd., traveled to Asunción to meet officials from the Paraguayan trade agency Rediex. Accompanying him was Executive Director Byeong Cheol Choi, and they were welcomed by Rediex senior export specialist Jimmy Kim, senior investment specialist Sebastián Gorostiaga and post‑investment services chief Aramí Arza. The talks centered on launching a green fertilizer plant in the Alto Paraná department, a move that could reshape the regional agricultural supply chain.
Paraguay’s hydroelectric advantage
Paraguay sits on one of the world’s most reliable sources of renewable electricity – the massive Itaipú and Yacyretá dams generate roughly 90 % of the nation’s power, all of it cheap and carbon‑free. That low‑cost electricity is the secret sauce for producing green hydrogen, the feedstock the Korean firm wants to turn into urea‑based fertilizer. While traditional nitrogen‑fertilizer factories rely on natural‑gas‑derived ammonia, a green route slashes emissions dramatically.
Experts point out that Russia and Iran dominate the conventional market, but a shift toward low‑carbon inputs is already nudging buyers in Brazil, Argentina and Uruguay to look north of the equator. For Paraguay, the lure is simple: turn its abundant power into a high‑value export.
Cheong A Chemical’s South American strategy
Founded in 1987, Cheong A Chemical has built a reputation for petrochemical innovation and fertilizer blends in Asia. In recent years the company has eye‑balled expansion into emerging markets, eyeing South America as the next growth frontier. The Alto Paraná site was chosen for two reasons – proximity to the Brazilian border and existing rail links that can shuttle bulk product within 24 hours.
During the meeting, Seo Gyu Yoon explained, “Our goal is to create a sustainable supply chain that serves Brazilian growers while keeping the carbon footprint as low as possible.” Byeong Cheol Choi added that feasibility studies, slated to wrap up by early 2026, will evaluate everything from water usage to logistics costs.
Project specifics: What the plant will look like
- Capacity: around 150,000 metric tons of urea per year, enough to meet roughly 15 % of Brazil’s fertilizer demand.
- Technology: electro‑lysis powered by hydroelectric energy to produce green hydrogen, then combined with nitrogen from air in a low‑temperature Haber‑Bosch process.
- Location: a 32‑hectare greenfield in the city of Hernandarias, Alto Paraná, chosen for its easy river transport to the Port of Paranaguá.
- Investment: initial capital outlay estimated at US$120 million, with a further US$30 million earmarked for downstream distribution facilities.
The plant’s design incorporates a closed‑loop water system, meaning virtually no wastewater leaves the site – a point highlighted by Aramí Arza as aligning with Paraguay’s 2023 sustainability goals.
Incentives and the regulatory landscape
Paraguay’s government has rolled out a suite of incentives to lure foreign capital. The Maquila regime, revamped by Law No. 7547, guarantees a flat 1 % tax on net profits for qualifying manufacturers. Law No. 7548 extends exemptions to income tax and foreign‑exchange controls, making repatriation of earnings virtually frictionless.
Rediex officials emphasized that the project qualifies for both regimes, plus additional grants for renewable‑energy‑linked ventures. Jimmy Kim noted, “The Ministry of Industry and Commerce is prepared to fast‑track any required permits – we see this as a flagship green‑tech project for the country.”
World Bank financing and broader economic impact
Just four days after the Korean delegation’s visit, the World Bank Group approved a US$150 million Development Policy Loan for Paraguay. The loan targets two pillars: strengthening competition law enforcement and improving the investment climate for sustainable projects.
Marianne Fay, the bank’s Southern Cone division director, said, “This operation underscores our partnership with Paraguay and our shared commitment to unlock the country’s economic potential through private‑sector growth.” The financing is expected to bolster the legal framework that will protect investors like Cheong A Chemical, while also funding infrastructure upgrades along the Brazil‑Paraguay corridor.
Analysts project that, if the plant materializes, Paraguay could see up to 800 new jobs during construction and 150 permanent positions once operating. The ripple effect may also spur ancillary industries – from logistics firms to equipment maintenance providers.
Next steps and outlook
Cheong A Chemical plans to return to Paraguay in late September with a detailed feasibility report. If the findings are positive, a final investment decision is expected by early 2026, followed by a groundbreaking ceremony slated for mid‑2027.
Meanwhile, the Paraguayan Ministry of Industry and Commerce is drafting a bilateral trade‑promotion agreement with South Korea, which could streamline customs procedures and add further incentives for Korean firms.
All eyes are on Alto Paraná. Should the project move forward, it would not only diversify Paraguay’s export basket but also provide a tangible example of how renewable energy can power agriculture on a commercial scale.
Frequently Asked Questions
What types of fertilizer will the Paraguayan plant produce?
The facility is designed to manufacture urea using green hydrogen derived from hydroelectric power. The resulting product will be a low‑carbon nitrogen fertilizer aimed primarily at Brazil’s soybean and corn growers.
How does Paraguay’s Maquila regime benefit Cheong A Chemical?
Under the Maquila system, qualifying manufacturers pay a flat 1 % tax on net earnings, and they enjoy exemptions on income tax and foreign‑exchange controls. This dramatically lowers the cost of doing business and makes profit repatriation straightforward.
Why is Brazil the primary export market for the fertilizer?
Brazil is the largest agricultural producer in South America and has been pressing for greener inputs to meet sustainability standards. Its proximity to Alto Paraná, coupled with existing rail and river links, makes it the most logical destination for the plant’s output.
What role does the World Bank loan play in the project?
The US$150 million loan is earmarked for strengthening Paraguay’s legal framework for competition and investment. By improving the business environment, the funding indirectly supports projects like Cheong A Chemical’s plant, making it easier for foreign investors to secure permits and protect their interests.
When can we expect the plant to be operational?
If the feasibility study confirms the assumptions, the final investment decision should be made by early 2026, with construction beginning later that year. A realistic start‑up date would be mid‑2027, assuming no major delays.
Sihle Tana
I am a journalist with a passion for covering daily news in Africa. My work has taken me across the continent, reporting on significant events and stories that impact communities. I strive to bring insightful and comprehensive news coverage to my readers.
The idea of turning Paraguay’s cheap hydro power into fertilizer is interesting.
The project shows how energy can be used for more than just lights.
Green hydrogen is the buzz word these days.
The Korean firm wants to make urea without natural gas.
That could cut emissions a lot.
Paraguay already has massive dams that run almost all the time.
Using that power for chemistry seems logical.
The plant could supply Brazil’s huge soybean farms.
If the project works, jobs will appear in the region.
Construction will need many workers and engineers.
After that, a smaller crew will keep the plant running.
The World Bank loan adds credibility to the plan.
Investors will feel safer with that money behind it.
Still, feasibility studies must confirm the water and logistics numbers.
In the end, the success will depend on how well the chemistry matches the power supply.
Paraguay’s hydro potential is truly a regional asset, and the Korean consortium is tapping into it with admirable foresight; the green fertilizer concept aligns with global sustainability goals, and it could reshape export dynamics for Brazil, Argentina, and Uruguay.
The Maquila tax regime makes the financial math look attractive, especially with a flat 1 % net profit tax; however, the real test will be the logistics pipeline from Hernandarias to the Port of Paranaguá.
It’s also encouraging to see the World Bank stepping in, providing both capital and regulatory support, which should smooth the permitting process.
Overall, the project appears well‑positioned, but diligent monitoring will be essential to keep timelines on track.
Let’s hope the feasibility study confirms the water usage assumptions and transport costs.
Hey folks, great to see such a forward‑thinking initiative! This project could really boost the region’s economy while keeping carbon footprints low 😊.
If anyone’s looking for ways to get involved, consider reaching out to the Rediex team – they’re open to partnerships and knowledge sharing.
Remember, clean energy projects thrive on collaboration, so let’s keep the conversation positive and inclusive.
Keep the good vibes coming, and best of luck to all the teams involved! 👍
Bold move, hope it pays off! 😜
The proposed urea synthesis leverages electro‑lysis‑derived green H₂ integrated with a low‑temperature Haber‑Bosch cycle, thereby achieving a carbon intensity reduction of approximately 70 % relative to conventional NLNG‑based processes.
From a techno‑economic perspective, the capital intensity of US$120 million for a 150 ktpa capacity translates to an EPC cost of roughly US$800 per tonne, which is competitive given the hydro‑electricity cost curve (< $0.03 /kWh).
Moreover, the closed‑loop water reclamation system adheres to ISO 14001 standards, mitigating effluent discharge concerns.
However, the project's success hinges on securing uninterrupted grid access and validating the scalability of the membrane electrolyzers under variable load conditions.
In sum, while the conceptual framework aligns with green chemistry principles, rigorous validation of the supply chain logistics remains imperative.
Wow, that reads like a sci‑fi script, but it’s happening right here in Alto Paraná! 🌟 The sheer ambition of turning endless river power into life‑giving fertilizer is nothing short of spectacular, and I can already picture fields of golden soybeans bowing to this green miracle.
Let’s cheer on the engineers and hope the feasibility study shines brighter than a sunrise over the Paraná River! 🚀
I think the project has merit, but it’s important we keep a balanced view. The environmental benefits are clear, yet we must also consider potential impacts on local water resources. Dialogue with community stakeholders will be key to building lasting trust. Let’s stay open‑minded and support a solution that works for everyone.
Dear colleagues, I wish to express my strong endorsement of this endeavour. The alignment of renewable energy assets with agricultural inputs exemplifies strategic foresight. Furthermore, the World Bank’s involvement underscores the project's credibility. I remain confident that, with diligent execution, the initiative will yield substantial socio‑economic dividends.
I suppose the formal tone is appropriate, though I’m not entirely convinced it changes the fundamentals. It’ll be interesting to see how things develop.