Paraguay is committed to diversifying energy and one sector that the country is looking into in the near future is nuclear energy, said Javier Gimenez, Paraguay's minister of industry and commerce, in an interview with The Korea Herald in Seoul, stressing that the Latin American country is seeking investments from South Korean companies in its energy sector.

“Korea is a specialist in nuclear energy,” said Gimenez, pointing to nuclear energy as a promising area for South Korea that aligns well with Paraguay’s ambitions.

Vice Minister of Mines and Energy Mauricio Bejarano, who also attended the interview, discussed Paraguay’s energy sector, with planned investments in electricity distribution, transmission, and new energy projects in solar and hydroelectric power.

“We welcome Korean companies looking to generate and distribute energy,” the vice minister told The Korea Herald.

Paraguay serves as a strategic gateway to South American markets, the minister said, introducing a plan to build a 1,000-kilometer pipeline that would transport natural gas from Argentina to Brazil via Paraguay.

“This is something that Paraguay needs to be looked upon as a very strong candidate, for a new generation of energy within the country that is growing very fastly at around 5 and 6 percent per year,” he said.

During his visit to Seoul, Gimenez met his Korean counterpart, Cheong In-kyo, and signed a Trade and Investment Promotion Framework, according to South Korea's Trade Ministry.

The agreement focuses on trade and investment, making Paraguay the second Mercosur country to secure such a deal with Korea after Brazil.

Mercosur is a regional trade agreement known as the Southern Common Market founded in 1991 by Argentina, Brazil, Uruguay and Paraguay.

The TIPF aims to enhance economic ties and foster cooperation across various sectors, but does not include tariff-free terms like a traditional free trade agreement.

South Korea acknowledges Paraguay as a key strategic partner within Mercosur, thanks to the country's economic growth, low wages, favorable tax rates and business environment.

According to South Korea's Trade Ministry, 40 percent of the top 20 car models sold in Paraguay in 2023 were Korean-made, paving opportunities to increase exports and position Paraguay as a manufacturing hub within the Mercosur region.

During the visit, Gimenez also met with Korea Automotive Technology Institute and the Korea Testing & Research Institute, aiming to build a skilled labor force in Paraguay’s emerging automobile industry.

"Ten Paraguayan experts recently completed a five-month training program in South Korea. We hope to take that number up to 50,” the minister told The Korea Herald.

The minister noted that although the two countries have not signed a free trade agreement, Korea exports $20 million in goods to Paraguay annually.

Seeing this potential, he aims to boost trade by engaging with major Korean companies like Hyundai Motor and Kia, offering incentives such as a low 10 percent corporate tax rate and supportive industrial laws.

"If you’re an industry coming from South Korea to Paraguay, you will not pay taxes on importing machinery or equipment," Gimenez assured, highlighting the benefits under Paraguay's Maquila Law, which allows foreign companies to export goods with minimal tax obligations.

"Paraguay is a land of opportunity for South Korean businesses."