On 11/25/2021 the Congress passed the bill “THAT REGULATES THE PROMOTION, GENERATION, PRODUCTION, DEVELOPMENT AND USE OF ELECTRIC ENERGY FROM NON-CONVENTIONAL NON-HYDRAULIC RENEWABLE ENERGY SOURCES” which aims to expand and diversify the energy production matrix of Paraguay towards the promotion, through public policies, of modified use of electric energy by producing and supplying energy from self-generators, co-generators, generators and exporters of non-conventional renewable electricity (the “Bill”).
The non-conventional renewable energy (“NCRE”) described in the Bill are sources of non-fossil energy, biomass, bioenergy, geothermal, solar, wind, and green hydrogen. In this sense, the production of electric energy from NCRE sources in projects with nominal generation capacity greater than one MW will require a license granted by the Under Secretary’s Office of Mines and Energy from the Ministry of Public Works and Communications, which will be the enforcement authority in case the Bill is promulgated and published
In the production of electric energy from NCRE sources for the NCRE export market, ANDE or the concessionaire of electric power system in the area, will grant free access and make capacity available to NCRE exporters, without prejudice, of its electric energy transmission facilities to enable international interconnection, in exchange for the payment of a fee for the use of such facilities, which will be regulated through an electric energy transport contract (after obtaining the license granted by the enforcement authority).
In addition to the above, the Bill raises interesting tax incentives, such as the exemption of Value Added Tax (VAT) for the importation of equipment, machinery, inputs for the development of the industry, such as 50% of the tax on the personal income, among others.
It should be clarified that regulation on the production of energy of hydraulic origin is excluded from this bill, which in principle will continue to be governed by Law 3009/2006 “On the independent production and transport of electric energy.”
The next step for this Bill is the Chamber of Deputies, for study and approval as a new NCRE law in Paraguay.
For more information, please contact Adriana Ocampos (adriana.ocampos@berke.com.py) and/or Martín Carlevaro (martin.carlevaro@berke.com.py).
