MercoPress. South Atlantic News Agency

World Bank grants loan to Uruguayan green hydrogen project

Kahirós project is located near Fray Bentos in Uruguay

The World Bank Group's International Finance Corporation (IFC), has announced its first global investment in green hydrogen, providing a U$20 million loan to the Kahirós project in Uruguay.

The pioneering undertaking is designed to decarbonize the heavy-duty logistics of the country’s crucial timber industry, positioning Uruguay as a regional hub for clean energy solutions, it was explained.

The Kahirós project near Fray Bentos is a consortium of Uruguayan companies (Ventus, Fidocar, and Fraylog), supported by Grupo Santander and the UN Renewable Energy Innovation Fund (REIF). It is expected to become operational in November 2026, marking the first comprehensive green hydrogen solution for freight transport in Latin America.

The initiative integrates solar energy, hydrogen production, and heavy transport into a single system.

Solar energy will be used to produce green hydrogen. The hydrogen will fuel a fleet of six specialized trucks tasked with transporting wood to the Montes del Plata pulp and paper mill.

Project director María José González noted that hydrogen offers a competitive advantage for the 24/7 forestry sector due to its faster refueling time compared to electric vehicles.

The IFC hailed the investment as a significant step toward addressing “hard-to-abate sectors” like transport.

The project is estimated to reduce CO2 emissions by 870 tons annually, equivalent to removing more than 300 cars from circulation.

The initiative is expected to lay the foundation for a new industry with the potential to generate over 30,000 direct jobs in Uruguay by 2040.

“Uruguay has made remarkable progress in expanding renewable energy sources, and this project represents an important step toward decarbonizing hard-to-abate sectors such as transportation,” IFC Vice President for Europe, Latin America, and the Caribbean Alfonso García Mora stressed.

González also pointed out that the initiative’s goal was to be a regional and global benchmark, sharing “lessons learned and opportunities” to advance clean technology in other markets.