Investment Opportunities - Renewable Energy in Uruguay (February 2016)

Uruguay is at the forefront of energy production base on renewable sources, providing great opportunities for investors.

Why invest in the renewable energy industry in Uruguay?

  • Uruguay has a consolidated democratic system, in which the three major political parties have taken turns in the Government, always with due respect for the business climate and the rules of the game.
  • Uruguayan economy grew by 5.1% on average between 2004 and 2015 completing 12 years of uninterrupted growth. our economy is expected to continue to grow during 2016-2017, albeit at a slower pace mainly due to the deteriorating regional context.
  • Uruguay is one of the main Foreign Direct Investment (FDI) recipients in the region. In 2014, FDI reached usD 2,781 million, which accounted for 4.8% of GDP.
  • Uruguay offers a favorable business climate, well-established social stability, with tax incentives for investors, and a strong corporate responsibility.
  • Law No. 16,906 on Investment Promotion and Protection states that foreign investment is granted the same treatment as national ones, with no restrictions to capital repatriation or transfer of benefits, dividends and interests.
  • Within the framework of the Investment Law, Decree 354/009 declares the energetic industry is one of the specific promoted activities, which provides this industry with important tax exemptions. The attractive promotion system allows industries investing in renewable energy generation to finance up to 80% of the investment through tax exemptions.
  • Based on the guidelines set forth by the Executive Branch in 2008 and approved by a multi-party committee in 2010, the energy policy in Uruguay is a State policy.
  • The Uruguayan energy policy has made a firm commitment to renewable energies, with significant short term integration goals and material tax benefits. These goals were actually achieved.
  • Uruguay has a privileged location which bestows favorable natural conditions for the generation of solar energy and wind energy, supplementing the capacity of the existing hydroelectric power resource. There are also interesting opportunities for biomass generation associated with agribusiness.
  • The legal framework approved in 1997 establishes open energy generation, enabling the entry of private participants to this phase of the electricity market.
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