Atome defends Villeta arbitration stance in Paraguay dispute

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ATOME Villeta arbitration dispute

Highlights

ATOME alleges Paraguay breached the UK-Paraguay Bilateral Investment Treaty regarding the Villeta green fertilizer project, signaling intent to pursue arbitration at ICSID rather than Paraguayan courts.
ATOME’s U.S.$665 million Villeta project—the largest foreign investment in Paraguay—relies on predetermined hydropower tariffs backed by government guarantees, with funding contingent on this regulatory framework.
Paraguay repealed the agreed tariff framework in June 2026, rejected ATOME’s proposed long-term power purchase deal, and delays now threaten commercial viability and could trigger nine-figure U.S. dollar arbitration claims.

Project dispute and treaty position

As reported by London Stock Exchange's Regulatory News Service, ATOME says recent media statements in Paraguay about the Villeta project and its dispute notice under the UK-Paraguay Bilateral Investment Treaty are materially incorrect or misleading.

The company says Paraguay has breached the treaty through acts and omissions involving ANDE and other state bodies, and maintains it has the right to pursue arbitration at the International Centre for Settlement of Investment Disputes in Washington, D.C. ATOME adds that it will not bring its treaty claims before any court or venue in Paraguay.

ATOME says its investment case rests on what it describes as clear guarantees from the Paraguayan state that hydropower would be supplied to the project at a predetermined tariff capable of supporting financing. The company points to a regulatory framework designed to attract industrial investment through known and bankable tariffs, as well as Resolution No. 356/2026 issued by Paraguay's Ministry of Industry and Commerce and a new power purchase agreement agreed with ANDE in April 2026.

Funding risk and pressure for a swift resolution

Villeta is described by ATOME as a world-leading green fertiliser plant with planned investment of U.S.$665 million, which it says would be the largest foreign investment in Paraguay's history. The company says international development finance institutions signed binding commitments to fund the project on the basis that the agreed tariff framework would support commercial viability.

ATOME says Paraguay repealed that framework in June 2026, just as construction was about to begin, and that no viable replacement terms have yet been agreed despite subsequent discussions. The company says it previously proposed a long-term power purchase agreement starting at U.S.$35 per MWh for the first five years of production after a four-year build period, rising to U.S.$37 per MWh for the following five years and then moving to the standard industrial tariff.

According to ATOME, that proposal has effectively been rejected publicly by ANDE and the government, making a swift solution harder to achieve. The company says months of delay have raised costs, damaged the viability of the existing funding, construction and offtake structure, and could leave it with no option but to file for arbitration and seek damages well into nine figures in U.S. dollars if a bankable settlement cannot be reached.

The legal fight surrounding China Evergrande Group’s collapse has intensified as competing claims over large money transfers linked to founder Hui Ka Yan move through Hong Kong’s courts. We previously reported that a Hong Kong property tycoon filed suit seeking repayment of alleged decade-long loans to Hui, while Evergrande’s liquidators separately sued him over alleged transfers in the opposite direction—an escalation that could complicate the liquidation process and affect creditor recoveries.

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