March 21, 2007 / 6:41 PM / 12 years ago

Paraguay sets goal on biofuel exports

ASUNCION (Reuters) - Paraguay plans to export at least $50-million worth of biofuels within four years as part of a wider energy project that aims to attract foreign investment, the government said on Wednesday.

As part of the plan, the government also plans to reduce imports of conventional fuels by $150 million over the same time frame, Industry and Commerce Minister Jose Maria Ibanez told the Reuters Latin American Investment Summit in Asuncion.

Paraguay has no oil reserves of its own and has to rely on imports to meet its fuel needs.

“We’re developing a national plan with a goal of close to 300 million liters between now and 2011,” he said. “It’s an enormous opportunity for foreign investment.”

He added that six firms from neighboring Brazil, the United States and Japan were interested in working with Paraguayan businesses to set up sugar cane-processing plants. Sugar cane can be used to make ethanol.

“Agro-energy is the big issue worldwide at the moment and Paraguay is a country with great potential. We’ve got millions of hectares available for farming,” Ibanez said.

Biofuels, which include ethanol, and diesel made from vegetable oils, are increasingly seen as a cleaner, renewable energy alternative to fossil fuels.

Paraguay’s most important trade partner, Brazil is a top ethanol producer along with the United States. Both countries recently signed an accord to promote biofuels.

In 2006, Paraguay imported fuels and lubricants worth $691 million — roughly the same as the country earns from annual exports of soy products. Paraguay is the world’s No. 4 soy exporter and the oilseed is its top foreign currency earner.

Paraguay is one of South America’s poorest countries and officials recognize that it still has a reputation for corruption, despite efforts to fight graft and attract outside capital.

“Corruption is still a problem, but it isn’t one of the main difficulties for investment anymore because it’s no longer a common practice,” Ibanez said. “We’ve made a lot of progress.”

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