Elisa Facio became Uruguay’s minister of industry, energy and mining in November 2023. She has two main goals for her term: advancing the country’s ‘second energy transition’ of electric mobility and green hydrogen, and its new Uruguay Innovation Hub. She spoke with fDi about foreign investors’ role in achieving these goals. 

Q: How important are foreign investors to the second energy transition?

A: The global ambition towards decarbonisation is huge, and not all countries have the economic resources to develop everything at the speed that is needed. Today, we have 1.5 gigawatts of wind energy installed — but the potential is 30GW onshore and more than 250GW offshore. We have less than 0.5GW of solar energy, but a potential capacity of nearly 30GW. We have great potential, but we don’t have the funds. And there are countries — European countries in particular — that have the money but not the land or natural conditions, to develop, for instance, clean hydrogen. We have the opportunity but not the money, so foreign investment is really important for us. 

Q: How is the government supporting investment in this second transition?

A: We created the Green Hydrogen Sector Fund, which supports the installation of the first pilot project in the country — the modification of trucks to be propelled by clean energy — through a one-time non-refundable government grant of $10m over 10 years to develop local production and exports. Uruguay is also promoting a policy to encourage electro-mobility that incorporates fiscal benefits, regulations, training and infrastructure. We have reduced some import taxes for hybrid vehicles and exempted them for fully electric ones. Specifically for investors, there is the Investment Promotion Law, which provides tax exemptions and other benefits for projects that include elements of decarbonisation, such as the purchase of electric vehicles.

Q: Last year, the government started establishing the Uruguay Innovation Hub. What sparked this programme, and what is its status?

A: One of my goals is to propel Uruguay to the forefront of a knowledge economy via the Innovation Hub. This seeks to strengthen and accelerate startups in high-growth sectors such as deep-tech, green-tech and biotech. A lot of start-ups have already come to us from Argentina and Brazil. We want to further consolidate the strong local innovation ecosystem by attracting investors and more start-ups.

We’ve made a call for accelerators, which had a great response [14 submissions from around the world], and now we have an open call for a company builder to support the creation of biotech start-ups. The Innovation Hub, with the support of the US and Canada, was recently selected to lead the establishment of a network of investors aimed at mobilising venture capital in the 12 countries of the Americas Partnership for Economic Prosperity. This underscores the programme’s efforts to position Uruguay as an innovation hub for the region. 

Q: In November you visited China, which is a big investor in Latin America but has a small footprint in Uruguay. What do you hope to gain from this relationship? 

A: As a very small country, Uruguay has the need and the determination to open itself to the world. During our China visit, we emphasised the need to negotiate, trade, and establish a stronger relationship. Regarding investment, we highlighted Uruguay’s availability of resources to continue developing renewable energy, our industrial opportunities, access to regional value chains within Mercosur, plus biotechnology, semi-precious stones, timber and the Uruguay Innovation Hub. We also signed four memorandums of understanding related to mining cooperation on scientific research, legal metrology, technology, strengthen policy exchanges regarding the digital economy, and data and communication cooperate on capacity and policy development. Uruguay is open to negotiating with any nation and company. We do not close our doors.

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This article first appeared in the February/March 2024 print edition of fDi Intelligence