WSHPDR_2013_Final_Report-updated_version

In accordance with the requirements established by
Law No. 16466 of Environmental Impact (on 19
January 1994) and enabling regulations established in
regulatory code No. 349/005 (Evaluation of
Environmental Impact), an environmental permit must
be requested for hydropower projects with capacities
exceeding 10 MW or water flows higher than 0.5 m 3 /s.
Law No. 16 906 on the Promotion and Protection of
Investments provides a framework for encouraging
investments in the country, upon approval by the
designated Commission. Enabling regulation No.
354/009 promotes the generation of electricity from
non-traditional renewable sources and grants the
exemption of a significant percentage of the income
tax for electric generating companies at the start of
business, with subsequent reductions in following
years. Decree 455/007 of 26 November 2007
establishes tax benefits that may be granted (income
tax deduction according to amount of investment, tax
exemptions, VAT returns).
3. Scarone, M. (2010). Pequeñas Centrales
Hidroelectricas en Uruguay. Consultoria del proyecto
“Observatorio de Energias Renovables en Uruguay”.
4. Bloomberg New Energy Finance and Multilateral
Investment Fund (2012). Climatescope 2012: Assessing
the Climate for Climate Investing in Latin America and
the Caribbean. New York. Available from
www5.iadb.org/mif/Climatescope/2012/img/content/
pdfs/eng/Climatescope2012-report.pdf.
5. Organización Latinoamericana de Energía (2012).
2012 Energy Statistics Report. Quito.
Barriers for small hydropower development
Uruguay has the technical capacity to construct
medium- and large-scale hydropower, plus broad
experience of constructing reservoirs or dams.
However, as there are no small hydropower
constructions in the country, the experience with
small hydropower is not available. There are no
companies dedicated exclusively to this sector.
A high electrification rate of 97 per cent leaves little
room for potential foreign investors to expand or
those seeking finance initiatives to connect residents
to the grid. 4
An unsuccessful attempt to reform the power sector
has left a weak policy framework surrounding clean
energy, which could act as a disadvantage towards
potential investors. That coupled with a weak green
microfinance sector with only one institution offering
micro green loans makes the implementation of small
hydropower or green energy in general more difficult. 4
The topographic conditions (low head difference) and
variable river flows due to variable rainfall patterns
could be the causes for no small hydropower
development in Uruguay.
References
1. Central Intelligence Agency (2012). The World
Factbook. Available from
www.cia.gov/library/publications/the-world-factbook/
2. Administracion Nacional de Usinas y Trasmisiones
Eléctricas (2011). Annual Report. Montevideo.
Available from
www.ute.com.uy/pags/Institucional/documentos/Me
moria%20anual%202011%20aprobada%2015%20nov
%202012.pdf.
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