EFSD+ RET Guarantee supports Impact Fund Denmark’s USD 35 million investment in Paraguay’s first green hydrogen-based fertiliser plant
EU-backed guarantee helps scale low-carbon fertiliser production and advance industrial decarbonisation in Latin America
Brussels, 30 April 2026 – EDFI Management Company (EDFI MC), through its Renewable Energy Transition (RET) Guarantee Facility under the European Fund for Sustainable Development Plus (EFSD+), is supporting Impact Fund Denmark’s (IFDK) USD 35 million equity investment in Project Villeta, a pioneering low-carbon fertiliser plant to be developed in Paraguay.
Under the EFSD+ RET Guarantee Programme, Impact Fund Denmark and SDG II Fund benefit from a 60% guarantee cover, equivalent to USD 21 million (in euros). The EU-backed guarantee reduces investment risk and supports the financing of this first-of-its-kind project in Paraguay.
Project Villeta will involve the construction and operation of Paraguay’s first green hydrogen-based fertiliser plant. Located in an emerging industrial zone in Villeta, near the Paraguay River, the facility will produce low-carbon Calcium Ammonium Nitrate (CAN). Production will rely on green hydrogen generated by a 110 MW electrolyser powered entirely by renewable energy. By using green hydrogen from renewable electricity, emissions from production can be significantly reduced. Over the lifetime of the project, the plant is expected to avoid 14.5 million tonnes of CO₂ by replacing production from fossil-based manure plants. The project aims to demonstrate the commercial viability of decarbonising the fertiliser sector, a traditionally emissions-intensive industry. By integrating green hydrogen and renewable energy into fertiliser production, it will showcase a scalable pathway for producing green ammonia and low-carbon nitrogen-based fertilisers.
Beyond its climate impact, the project is expected to contribute to local economic development by supporting industrial activity and creating demand for local suppliers and service providers during construction and operation.
The RET Guarantee plays a key role in de-risking the investment by mitigating risks associated with the development and construction of an innovative, first-of-its-kind project, as well as market and technology-related uncertainties. It enables Impact Fund Denmark to support the project at scale and catalyse additional investment into green hydrogen and sustainable fertiliser production.
The RET Guarantee Facility is funded by the European Union through the EFSD+ and implemented by EDFI Management Company as part of the EU’s Global Gateway strategy. It aims to mobilise private investment in renewable energy and innovative clean technologies in emerging markets, contributing to climate action and sustainable development.
EDFI Management Company
EDFI Management Company (EDFI MC) is a multilaterally owned impact asset manager which delivers innovative development finance solutions that enable European DFIs, development banks and private sector investors to increase the scale and impact of their work. The company focuses on business models, technologies and geographies where other investors have not been able to operate at the desired scale given their resources and investment criteria. For more information, visit www.edfimc.eu
About the EDFI Renewable Energy Transition (RET) Programme
The EDFI Renewable Energy Transition (RET) Programme is a joint EFSD+ guarantee programme developed by European Development Finance Institutions and EDFI Management Company under the EU’s Global Gateway. With a guarantee envelope of up to €332 million, the Programme supports debt and equity investments in renewable energy projects—including wind, solar, hydro, biomass, geothermal, and green hydrogen—across Sub-Saharan Africa, Latin America and the Caribbean, and Asia and Pacific. RET aims to increase access to clean energy, advance the Paris Climate Agreement and Sustainable Development Goals, and accelerate the energy transition in high-impact markets. For more information see https://edfimc.eu/what-we-do/renewable-energy-transition-ret/
About EFSD+
The European Fund for Sustainable Development Plus (EFSD+) is the financing arm of the EU’s Global Gateway strategy. It provides guarantees and blended finance instruments to support investments that contribute to sustainable development, particularly in fragile and emerging markets.
About Global Gateway
Global Gateway is the European Union’s strategy to boost smart, clean, and secure connections in digital, energy, and transport sectors, and to strengthen health, education, and research systems across the world. It aims to mobilise up to €300 billion in investments between 2021 and 2027 to support sustainable and trusted partnerships globally.
