Uruguay is moving forward with its first green hydrogen project, known as Project Kahirós, aiming to support the country’s ongoing efforts to reduce greenhouse gas emissions and promote clean energy. The initiative will use solar power to produce hydrogen, which will then fuel a fleet of six electric trucks for transporting wood to Montes del Plata, a major forestry company. The project site is located near Fray Bentos.
Green hydrogen refers to hydrogen produced using renewable energy sources. This method can help replace fossil-based fuels in industries that are hard to decarbonize, such as heavy industry and long-haul transport. Although more than 1,000 green hydrogen projects have been announced worldwide, fewer than 5% have reached the investment stage. Currently, long-term purchase agreements cover about 2 million tons of green hydrogen per year globally—just a small fraction compared to the total market for traditional hydrogen.
Some key challenges facing the sector include high upfront equipment costs (such as electrolyzers), limited availability of stable and competitive renewable energy, lack of proven technical and commercial viability at scale, insufficient infrastructure and distribution networks, unclear regulatory frameworks, and the need for government incentives.
Uruguay already generates over 90% of its electricity from renewable sources and has nearly eliminated fossil fuels from its power generation mix. However, transportation still accounts for 11% of national emissions. With projected investments totaling $19 billion by 2040 aimed at building this new industry, Uruguay is seeking further progress in decarbonizing its economy through solutions like green hydrogen.
Project Kahirós will feature a 4.8 MW solar plant with over 8,000 panels generating clean electricity. An electrolyzer will use this power to separate water into hydrogen and oxygen molecules—producing an expected 77 tons of green hydrogen annually. A refueling station will compress the gas so that trucks can be recharged in less than an hour before transporting wood along set routes.
According to project organizers: “It is the first green hydrogen project for heavy transport in Uruguay. It helps reduce up to 870 tons of CO₂ per year—the equivalent of removing more than 300 cars from circulation.” They add: “The solution is scalable and can serve as a model for other countries in Latin America.” Organizers also highlight that it marks “the beginning of a new industrial sector combining clean energy, transport and jobs.”
Project Kahirós involves several stakeholders:
- Kahirós: The operating company formed by Ventus (renewable energy developer), Hyundai Fidocar (supplier of electric-hydrogen trucks), and Fraylog (responsible for logistics).
- Montes del Plata: Main customer using the trucks.
- Grupo Santander: Investor providing asset ownership.
- International Finance Corporation (IFC), part of the World Bank Group: Provider of a $20 million loan plus sustainability expertise.
- United Nations’ Renewable Energy Innovation Fund (REIF): Lender offering $1 million alongside technical assistance.
“The IFC’s involvement with financing confirms Uruguay’s pioneering role within the World Bank Group,” said representatives from IFC.
The total cost amounts to $38.7 million—with funding including loans from both IFC ($20 million) and REIF ($1 million). The goal is not only emission reductions but also economic development; projections estimate more than 30,000 direct jobs could be created in Uruguay’s green hydrogen sector by 2040.
Operations are expected to begin at the end of 2026.