Investment opportunities in Paraguay
Paraguay: Why You Should Get Involved
Paraguay has achieved impressive economic growth over the past decades. The country ranks first in the Forestry Investment Attractiveness Index, which evaluates growth potential in the forest sector across Latin America. Slowly rising wood prices and room for value chain improvements offer immense investment opportunities. Land owners are looking for investment to diversify production away from traditional annual crops to climate resilient production systems such as commercial forestry.
Expansion of agriculture and livestock have historically led to massive deforestation and biodiversity loss in Paraguay. Forest landscape restoration investments are emerging as a promising strategy to counteract this trend and buffer the increasing frequency and severity of extreme weather events such as flooding and heat waves. In short, forest landscape restoration generates high climate risk adjusted returns and delivers ecosystem benefits such as soil improvement, water retention and biodiversity protection.
Paraguay has seen rapid improvements in quality of life, access to education, and life expectancy over recent decades, but many indigenous and rural communities have not benefitted from this trend. In the absence of an agrarian reform, subsistence farmers have been largely neglected. Inequality has spurred conflicts over land and created social unrest. Forest landscape restoration investments can reduce rural poverty by creating long-term, quality jobs where they are most needed.
The Paraguayan government has created a suitable enabling environment for forest landscape restoration investments, for example through a USD 40 milion budget line for concessional loans issued through banks. Halting deforestation as well as increasing planted forest area are part of the country’s national climate strategy. Laws prohibit deforestation in Western Paraguay and limit it in the Chaco. Paraguay grants tax breaks, full repatriation of profits, and national treatment for foreign investors.