Uruguay and Germany will cooperate to promote energy transition

Thanks to its wholly renewed matrix, Uruguay appears as a new player in clean energy generation.
Publication date: 30/03/2023


The agreement, signed by the Uruguayan Minister of Industry, Energy and Mining, Omar Paganini, and his German counterpart from the Federal Ministry for Economic Affairs and Climate Action (BMWK), Robert Habeck, enables the creation of a steering committee made up of ministers from both countries. In addition, technical working groups will be created to promote exchange and actions on issues such as green hydrogen, energy efficiency, electric mobility and battery storage.

This new alliance with the German Government—a strategic partner that has led the decarbonization policy in the world— places Uruguay as one of the few countries at a global level signing and is possible thanks to the thorough work carried out by Uruguay in reconverting its electricity matrix. Now, this effort continues with the second energy transition aimed at reducing the use of fossil fuels in the total energy matrix.

"Partnering with Germany, a leader in renewables and a first mover in the quest towards a hydrogen economy, is a remarkable step for our country, which is committed on a national level on energy transition since the multiparty agreements of 2010 and is now moving on to our second energy transition, with an overarching environmental policy", Minister Paganini stated.

The signing of the agreement took place within the framework of Uruguay’s participation in the Berlin Energy Transition Dialogue Conference on March 28 and 29, where the country was represented by Minister Paganini, the coordinator of the H2U Program for green hydrogen development at Ministry of Industry, Energy and Mining, María José González and the President of ANCAP, the national oil company, Alejandro Stipanicic.

Energy Partnership is an instrument of the Federal Ministry for Economic Affairs and Climate Action (BMWK) with countries committed towards full energy transition to create a global network aimed at facilitating energy policy exchange at the inter-governmental level and foster energy policy innovation and economic cooperation. 

The signing of the Joint Declaration of Intent (JDOI) establishes a general framework to further energy policy dialogue and technical cooperation. This will enable the development and improvement of sustainable energy infrastructure, as well as the creation of modern and efficient energy markets, in particular through the promotion of increased use of renewable energies and energy-efficient technologies.

Uruguay completed the first energy transition in the last decade, which allowed 98% of the electricity demand in an average year to be supplied by renewable sources such as wind, biomass, photovoltaic, and hydropower.

With sustained economic growth, social and political stability, forward-looking legislation, and privileged natural resources, Uruguay is a world leader in renewable energies and was thus considered by Germany when defining this agreement.

The country’s geographic location and its mix of renewable sources make it ideal for the generation of solar and wind, with a significant complementarity of factors, which are combined with a landscape of rolling plains and hundreds of miles of ocean and river coastline that facilitate port and land logistics.

Moreover, Latin America’s most equitable country with the highest average income achieved this transformation by firmly committing to environmental care and sustainable production. Using advanced legislation and incentive schemes, it encouraged significant private sector investments in partnership and alliance with the public sector.

With green hydrogen and the promotion of electric mobility, Uruguay now intends to complete its energy transformation. In this second stage, which the country has already begun to embark on, new challenges will be taken on, including developing a hydrogen economy and the continued decarbonization of the energy sector and raw material production.

The agreement will allow Uruguay to keep positioning itself as an appealing country for attracting investment, expand its economic openness towards Europe in future energy markets, and consolidate its position as a global renewable energy supplier.