PARAGUAY TRENDS AND DEVELOPMENTS Contributed by: Federico Valinotti, Andrés Nasser, Álvaro Rojas, Vivian Maldonado and Juan Manuel Ros, BKM - Berkemeyer
tively launching “SIPAP 2.0”. The new framework expands the perimeter to all payment system partici - pants, including private payment service providers and system administrators, and subjects them to the Central Bank’s licensing, supervision, interoperability and tariff-setting powers. It ratifies the legal validity of digital instruments and truncation, hardens the finality of transfer orders, and creates a graduated sanctions regime. Critically, it elevates free retail interbank transfers to a legal guarantee and enables cross-border outsourc - ing by authorising external service providers under controlled arrangements. For banks, processors, fin - techs and e-money propositions, this is the missing supervisory backbone for a modern, open payments ecosystem – and a necessary complement to the uni - fying new capital markets law approved in November 2025. Together, these moves signal a policy intention to reduce fragmentation, enhance resilience and facil - itate domestic-foreign connectivity in financial rails, custody and post-trade. Carbon credit legal architecture Paraguay is rapidly emerging as a credible player in the global voluntary and compliance carbon credit market, driven by a strong regulatory framework that prioritises certainty, credibility and consistency. The enactment of Law No 7190/23 and its subsequent regulation through Decree No 3369/25 mark a signifi - cant turning point for carbon credit initiatives in the country. These legal instruments provide long-term assurances to investors and project developers by clarifying ownership rights, streamlining administra - tive procedures and establishing a transparent registry system. Notably, the Law confirms that carbon credits are privately owned assets, exempt from VAT on the transfer of credit, and subject to predictable fees – key factors that enhance investor confidence and project viability. The Decree further strengthens Paraguay’s position by introducing a dedicated Carbon Market Directorate within the Ministry of Environment (MADES), tasked with overseeing project validation and registry opera - tions. It also distinguishes between voluntary and compliance markets, allowing voluntary projects to retain 100% of their credits without mandatory with -
holdings, whereas compliance market credits will be subject to a withholding of 3% to 10%. To ensure integrity, MADES will be responsible for validating certain methodologies from recognised standards, such as Gold Standard and VCS, that are entitled to obtain a “Letter of Authorisation”, which will facilitate access to higher-value compliance markets, such as ITMOs stemming from Article 6.2 of the Paris Agreement (like the bilateral arrangement between Paraguay and Singapore). These developments reflect Paraguay’s commitment to building a robust, trans - parent and investor-friendly carbon credit ecosystem that can scale sustainably over time. New PPP framework In January 2025, Law No 7452/25 replaced the prior PPP regime, expanding fiscal space, introducing a right of first refusal for private proponents, strength - ening lender protections, and granting the Ministry of Economy and Finance (MEF) flexible powers to enable investment. The ceiling on state commitments rose to 4%, with an annual cap on firm and quantifiable contingent payments increased to 0.8% of prior-year GDP. This creates room to structure availability-based remuneration and support non-self-financing projects, notably in social infrastructure and complex transport undertakings. The law increases public contributions in privately originated projects up to 25% of total cost, aligning risk allocation with sector realities. The right of first refusal incentivises well-prepared unsolicited pro - posals by allowing the original proponent to match the best bid within a regulated margin. For financ - ing, the statute clarifies security rights over contract receivables and SPV equity, and operationalises step- in rights for creditors to ensure continuity of service and safeguard value in distress scenarios. The MEF is designated as the lead PPP authority and may author - ise projects below the general minimum investment threshold and adjust fiscal limits as warranted, subject to policy safeguards. Effective delivery under the new regime relies on pru - dent portfolio management, standardised practices, rigorous cost-benefit analysis, staged commitments over time, and capacity building across structur -
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