Uruguay Irrigation Opportunities

Uruguay’s 2022–23 drought highlighted the urgent need for modern irrigation across its agribusiness sector. Agriculture accounts for 80% of exports and consumes 87% of freshwater, yet only 12.8% of farmland is currently irrigated. The government is prioritizing water security through tax incentives, international financing, and its National Adaptation Plan for Agriculture. With agricultural water demand expected to grow 35% by 2050, stakeholders across all farm sizes are exploring irrigation investments.

Demand is rising for both entry-level and advanced systems. Farmers and cooperatives are seeking reservoirs, pumps, pipelines, drip systems, and increasingly precision irrigation tools such as sensors, satellite scheduling, and digital management platforms. Strong post-sale support and reliable local partnerships remain critical purchasing factors.

Key growth drivers include irrigation for fodder crops in livestock production, a legal framework enabling farmer cooperatives to share infrastructure costs (Law 19.553), and bundling with renewable energy, especially solar-powered systems. The government’s openness to pilot projects and PPPs further expands opportunities.

Challenges to consider are slow investment approvals, environmental and social permitting requirements, high energy costs, and price competition from regional and Chinese suppliers. Still, U.S. equipment is valued for durability and service quality, giving it a premium positioning.

Financing tools such as EXIM Bank guarantees and direct loans can make turnkey irrigation projects more feasible, covering up to 85% U.S. content and portions of local costs.

For details on specific opportunities, contact Office.Montevideo@trade.gov.