Green hydrogen deal collapse exposes Paraguay's institutional friction gap.

The suspension of Atome Energy shares on the London Stock Exchange—a direct consequence of a stalemate with state-owned ANDE in negotiations over a green hydrogen project in Paraguay—is the day's most revealing story: it condenses into a single episode the tension between the modernization ambitions that Santiago Peña's government showcases in its official reports and the institutional frictions holding back the arrival of larger-scale foreign capital.

Atome Energy, listed on the London Stock Exchange, saw its shares suspended after hurdles in its negotiations with the Administración Nacional de Electricidad. The case is no minor matter. Paraguay has built in recent years a narrative of an open economy—its trade openness index exceeds the Latin American and Caribbean average by 27 points, according to data released this week—and the Central Bank reports GDP growth of 6.6% in 2025, accelerating to 5.8% in the first quarter of the current year. The International Monetary Fund, which adjusted its growth projection to 4.4% for this year albeit with downside risks, acknowledges the country's macroeconomic solidity. However, the Atome episode illustrates what several economists have pointed out this week with surgical precision: Paraguay needs stable and predictable rules to attract larger-scale investment, and the gap between rhetoric and institutional practice remains considerable.

That same disconnect appears in the energy sector with greater urgency. Analysts warn that the country could enter an energy "red alert" by 2030 if the gap between electricity supply and demand is not resolved. In that context, the suspension of ANDE's $6.4 million tender for a solar plant—without satisfactory public explanation—and the tariff crisis that President Peña omitted from his Annual Report aggravate a structural picture that GDP growth cannot mask. Itaipú, for its part, reported a 20.6% increase in energy supply to the country in the first half of 2026 and is advancing on certification of its first green hydrogen production unit, representing a concrete step toward diversifying its energy mix, though insufficient given the magnitude of the projected challenge.

On the fiscal front, the picture is equally ambivalent. Public debt rose by $1.333 billion in just four months, interest payments grew between 12.9% and 16.8% depending on the measure used, and the Caja Fiscal deficit reached $182 million in five months. The government is processing external loans of more than $1.6 billion and is studying a new bond issuance in the local market, where Treasury securities already total some $1.2 billion. Economists consulted this week were categorical: the cost of missing the fiscal target would far outweigh the impact of a potential depreciation of the guaraní, underscoring that the credibility of the fiscal rule is the most valuable asset Asunción can offer international debt markets.

The reform of the Caja Fiscal, which the president of the Chamber of Deputies confirmed will be enacted this week with modifications, is the immediate acid test for that credibility. Simultaneously, the new Economy Minister, Óscar Lovera, will have to balance private-sector demands—which acknowledged progress but called for accelerating structural reforms—with pressure from the IMF, which urged Paraguay to deepen labor formalization and expand social protection as conditions for sustaining more inclusive growth.

In the labor market, the minimum wage adjustment took effect today amid a controversy fracturing the business community. Asimcopar, the association of small and medium-sized enterprises, warned that the increase, adopted without sufficient technical criteria, will curb investment. The central argument: barely 17.7% of the 1.9 million workers legally covered by the minimum wage actually receive it, meaning the instrument primarily impacts the formal sector without correcting the structural informality that the IMF itself identifies as the main obstacle to equitable growth. Economists consulted by ABC Color disagreed on the inflationary impact of the measure, though they concurred that its real effect on purchasing power will be limited.

Bank credit adds another warning signal. Consumer lending already represents 20% of the financial system's total portfolio, and at least one former minister described that expansion as a "red flag," while rates in guaraníes are rising and those denominated in foreign currency are falling, shaping a scenario of more expensive domestic financing. The reduction in credit card fees that took effect today—and which Petropar accompanied with a selective cut in the price of regular diesel, without extending it to gasoline—are the only signs of relief for consumers on a day heavy with pressure on household spending. Buyers at the Mercado de Abasto, meanwhile, refute the official deflation narrative in Guaraní with a phrase that has gone viral: "hepy eterei está todo"—everything is terribly expensive—a contrast the Central Bank will find difficult to ignore.

What to watch closely in the coming days is the vote on the Caja Fiscal reform in Congress, the resolution—or deepening—of the ANDE-Atome impasse, and new Minister Lovera's meetings with multilateral organizations in France, where the country's stance toward international debt markets will take concrete shape. The second-half window, which economic agents characterize as favorable, remains open, but it is narrowing.

**Atome Energy (LSE: ATOM)** — The London Stock Exchange suspended the company's shares after its negotiations with Paraguayan state-owned ANDE for a green hydrogen project stalled, according to ABC Color. The episode exposes the regulatory and institutional risk facing international investors in the country's energy sector and generates uncertainty about the project's timeline.