ECB Group and government of Paraguay sign Free Zone contract for installation of green biofuel plant

This ECB Group release was published using machine translation.

São Paulo, September 15, 2020 - Brazilian businessman Erasmo Carlos Battistella, president of ECB Paraguay, an ECB Group company, signed a contract with the government of Paraguay that authorizes a Free Zone regime for the Omega Green project, an advanced biofuel plant in the district of Villeta, on the banks of the Paraguay River. The contract was signed on September 11 by three Paraguayan ministers of State: Finance, Benigno Lopez, Industry and Commerce, Liz Cramer, and Public Works and Communication, Arnoldo Wiens Durksen. The installation of the Free Zone was authorized by Presidential Decree No. 3269, of the President of Paraguay, Mario Abdo Benítez, signed on January 20, 2020.

"Even in this difficult period of the pandemic, it is a joy to sign this Free Zone contract and confirm the evolution of this giant industrial project for Paraguay," said Liz Cramer, Minister of Industry and Trade of Paraguay.

Free Zone provides legal security for investment in project

Paraguay today has two Free Zone areas and Omega Green opens the third model. This expertise consolidates an environment of legal certainty that is very favorable to investment in the country. For Omega Green, the Free Zone guarantees the maintenance of the legal conditions of the project for a period of 30 years, renewable for another 30, reinforcing the economic security for the investment.

The new Free Trade Zone is part of Paraguay's national investment program and is the first of an industrial nature with a focus on exports to countries in Europe, Asia and North America - the destination of Omega Green products. The decree highlights the initiative's ability to boost foreign trade, add value to raw materials produced in Paraguay, such as animal fats, vegetable oils and waste oils, generate jobs and bring cutting-edge technology to the country.

The complex was considered "of national interest" by the Paraguayan government due to its social and economic importance for the country. It is the largest private investment in a single project in the country's history and will bring savings to the economy of more than US $ 8 billion in 10 years, contributing to the balance in its trade balance. It will generate 3,000 direct jobs in the construction phase and about 2,400 direct and indirect jobs when it starts operating. More than 20,000 smallholder families are expected to benefit from certification programs for the supply of raw materials.

“Even with the pandemic, which impacted the whole world, we continue to make a giant effort not to stop the project - and we have already overcome many steps”, explains Erasmo Carlos Battistella. "In addition to the formalization of the Free Trade Zone that we are now celebrating, the impact study and the environmental license are completed, in accordance with the requirements and technical analyzes required by the Ministry of the Environment and Sustainable Development," adds Battistella. 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 engineering project is estimated to be completed by the end of the year, which allows maintaining the forecast of compliance with the schedule with the start of works for the beginning of next year, following the global recovery of the economy, with an estimated execution time of 30 months. "It is with great satisfaction that we will announce the conclusion of the first commercialization contracts soon, compromising the first years of production of Omega Green", he completes.

Launched in February 2019, the Omega Green project contemplates the construction of the first advanced biofuel plant in the Southern Hemisphere. The Villeta region has a strategic position, as it is a port and industrial district, just 45 kilometers from Asunción. It will produce HVO green diesel, an acronym in English for hydrotreated vegetable oil, renewable aviation kerosene, or SPK, in English, and Naphtha Verde, which is used in the chemical industry to manufacture green plastic and other sustainable products. HVO and SPK are biofuels that emit less greenhouse gases than fossil diesel. They will be exported to countries that are signatories to the Paris Agreement, such as the United States, Canada and members of the European Union.

Omega Green Project keeps moving forward

Barclays and UBS banks are responsible for the financial structuring of the project. Among the project's suppliers is Honeywell UOP, holder of UOP Renewable Jet Fuel Process ™ renewable fuel refining technology, Crown Iron Works, an American technology company that produces advanced biofuels from the processing of vegetable fats 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.

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.

With an estimated investment of US $ 800 million, the plant will produce renewable diesel and renewable aviation kerosene, advanced biofuels whose contribution in the process of transition to the decarbonization economy will increase exponentially. The production will be exported to Europe and North America.