G/TRIMS/W/132  
15 October 2013  
(13-5629)  Page: 1/2  
Committee on Trade-Related Investment Measures  Original: Spanish  
 
  URUGUAY – LOCAL CONTENT REQUIREMENTS 
FOR WIND FARM INVESTMENTS  
REPLIES TO QUESTIONS FROM THE UNITED STATES1 
The following communication, dated 7 October 2013, is being circulated at the request of the 
delegation of Uruguay.  
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  The United States draws the attention of Members of the WTO Committee on 
Trade-Related Investment Measures (TRIMs) to Decree 403/009 (24 August 2009), 
signed by the President of Uruguay, and issu ed by the Ministry of Industry, Energy and 
Mining. This decree addresses bids to cons truct wind farms in Uruguay, and provides, 
inter alia , at Article 2, part III: "For a bid to be considered, the domestic inputs that 
constitute the investment must reach at  least 20% of the total amount of the 
investment made for the construction of the wind farm, regardless of the infrastructure 
work necessary for their insertion in the en ergy grid. The bidding terms and conditions 
will establish a bonus mechanism at the compar ative price of the incorporation of local 
inputs above the 20% level." We request th at the Government of Uruguay help us 
understand the potential impact of this decree and provision by addressing the 
following questions: 
 1. What is the current legal status of Decree  403/009? Is it still in  effect? Has it been 
amended or superseded by any other measure? Are there other measures pertaining to 
the right to construct wind farms in Urug uay which should be read in conjunction 
with Decree 403/009 in order to understand the requirement to use "domestic inputs"? 
 
Reply 
 Pursuant to this decree, the UTE ( Administración Nacional de Usinas y Trasmisiones Eléctricas ), 
Uruguay's State-owned electricity company, issued a competitive call for bids from interested 
companies. Once the most suitable bids had been selected, the electricity procurement contracts were concluded. 
 
Under these contracts, the owners of generating fa cilities undertake to sell all the energy they 
produce to the UTE, which in turn undertakes to ac quire all of the energy delivered to it. The UTE 
dedicates this electric power to covering the demand of the population and may potentially 
export it.  It should be emphasized that the market for electric power generation in Uruguay is free and open 
to competition. This means that any Uruguayan or foreign person may install an individual power 
generating facility outside the framework of  the decree after obtaining environmental and 
administrative authorization to sell electricity to the UTE or to giant consumers. 
Decree No. 403/009 cannot therefore be interpreted as  a restriction on the installation of electric 
power generators on Uruguayan territory.  
                                               
1 G/TRIMS/W/125. G/TRIMS/W/132 
- 2 - 
  In short, Decree No. 403/009 is a renewable energy promotion tool that provides for the UTE to 
acquire a certain quantity of electricity derived from wind energy. However, the decree does not restrict any enterprise from setting up in Urugua y, generating electric power and marketing it on 
the contract market (in which case the buyer may be the UTE or any major consumer) or the spot 
market. Other than in the specific calls for bids mentioned above, companies are under 
no obligation to incorporate a minimum level of domestic content in the installation of wind farms. 
2. Decree 403/009 appears to address contracts, common in conjunction with 
construction of renewable energy projects, pu rsuant to which the Government agrees to 
pay for the energy output of the wind farm  that is delivered to the national grid. 
The electricity is not dedicated to governme nt use. Such contracts relieve the party 
constructing the wind farm from the need to find buyers for the electricity produced, and 
ensures the electricity is delivered to the national grid, rather than being exported. 
Is this a correct understanding of the purpose of Decree 403/009?  
Reply 
 
Decree No. 403/009 of 24 August 2009 is an execut ive policy directive that provides for the UTE 
to acquire wind power-generated electricity for the purpose of achieving greater diversification 
of the energy matrix, improving purchase pr ices and reducing greenhouse gas emissions. 
The decree is in keeping with the Energy Polic y 2008-2030 (agreed among all political parties 
represented in Parliament) aimed at promoting energy from renewable sources and with the 
Kyoto Protocol to the United Nations Framework Convention on Climate Change, ratified by 
Uruguay through Law No. 17.279. 
The decree urges the energy distributor, i.e. the UTE, to conclude special procurement contracts 
with providers to be set up in the country in order to produce wind-energy electric power up 
to a nominal capacity of 150 MW. Two amendments  were made to the wording of the decree, 
which were incorporated by Decrees No. 41/010 of 1 February 2010 and No. 343/010 
of 22 November 2010. 
The procedure laid down in Decree No. 403/009 established a specific framework for conducting 
a competitive bidding process for the acquisition of wind power generated by domestic or foreign-owned enterprises. The Decree No. 403/009 procedure has already been fully completed 
and no new contracts can therefore be concluded under the decree or the amendments thereto. 
Further details on the methodology behind the domestic component in the above procedure are 
available in a ministerial provision, at the following address: 
"http://www.energiaeolica.gub.uy/uploads/evalu aci%C3%B3n%20compone nte%20nacional%20ci
u.pdf". 
It should be pointed out that items considered as being domestically produced inevitably had to be 
incorporated in order to implement a project. In this context, only a number of items of domestic 
origin which would in any event have been incorporated, even if the decree made no mention thereof, were made eligible. 
3. As noted above, Decree 403/009 requires that "the domestic inputs that constitute 
the investment must reach at least 20% of the total amount of the investment". 
Can Uruguay provide any further information about how the level of domestic input is calculated? 
 
Reply 
 
Calculation of the domestic component for the purp oses of the call for bids made pursuant to 
Decree No. 403/009 was endorsed by decision of the Ministry of Industry, Energy and Mining, 
which is available at: "http://www.energiaeolica.gub.uy/uploads/evalu aci%C3%B3n%20compone nte%20nacional%20ci
u.pdf". 
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