The dispute between Atome and Paraguay over the planned fertiliser plant in Villeta has taken a new turn. After the British company notified Paraguay on September 17 of a potential international arbitration claim, former ANDE president Félix Sosa has challenged a central part of the company’s position.
Pytagua reported on September 18 on Atome’s notice of dispute and the possibility of international arbitration. The new issue is what the power contract actually signed with ANDE provides and which obligations can be derived from it.
What the 2022 contract says
The agreement between ANDE and Atome Paraguay SA was signed on May 3, 2022. According to an ABC Color review of the contract, it applies ANDE’s regular Category 620 tariff for very-high-voltage customers and provides for future changes to the tariff schedule to apply as well. It does not contain a fixed preferential electricity price of around $30 per megawatt-hour.
The presidential decrees issued in January 2026, which Atome cites in its notice of dispute, also do not form part of the contract signed in 2022. Amendments to the agreement require an addendum signed by both parties. Sosa said no such addendum or new ANDE contract was signed under the decrees.
The contract also states that disputes not resolved amicably are governed by Paraguayan law and must be brought before the civil and commercial courts of Asunción. On that basis, Sosa argues that Atome has no contractual claim against ANDE.
The fixed tariff belonged to a proposed replacement agreement
Atome’s own stock-market announcements help explain the apparent contradiction. In April, the company described a long-term power arrangement with a fixed price of $30.15 per megawatt-hour for the first 15 years. In a June 10 market update, however, Atome clarified that this was an agreed form of a new power purchase agreement intended to replace the existing variable-rate agreement from 2022. Execution of that replacement PPA was still outstanding.
The distinction is important. There is an executed 2022 agreement operating under a variable tariff framework. Separately, Atome and the authorities had been working toward a replacement agreement with long-term fixed terms supported by government decrees. Those later rules were subsequently changed and then repealed.
Atome’s treaty case is against Paraguay, not only ANDE
Sosa’s argument therefore does not by itself resolve the broader legal dispute raised by Atome. The company is not relying solely on its ANDE contract. Its notice is based on the bilateral investment treaty between the United Kingdom and Paraguay. Atome alleges that acts and omissions by the Paraguayan state, particularly the repeal of the presidential decrees, violated investment protections and removed the certainty over term and electricity price on which the project had relied.
In its September 17 announcement, Atome said an independent damages assessment put a potential claim well into nine figures in US dollars. No arbitration proceeding has yet been initiated. The parties first have a three-month consultation period under the investment treaty.
Sosa expressly limited his comments to ANDE and did not say whether other branches of the Paraguayan state may have made commitments to Atome. The dispute therefore involves two separate legal questions: what the signed ANDE contract actually guarantees, and whether broader conduct by the Paraguayan state could independently create liability under international investment law.
The principal new development since Pytagua’s first report is therefore not another arbitration threat, but a concrete challenge to the contractual basis of Atome’s position. According to Sosa, the long-term preferential tariff at the centre of the dispute does not appear in the ANDE contract that was actually signed.