Uruguayan President José Mujica will seek regional support for the development of a deepwater port in Rocha department, in an effort to facilitate financing for the project, an official from the presidential office told BNamericas, expanding on press reports.

Mujica discussed the project with his Brazilian counterpart Luiz Inácio Lula da Silva during a bilateral meeting in Brazil last week.

The project would require an estimated US$1bn investment, and was originally submitted to Uruguayan authorities by Spanish firm Benel in 2007. The port was partly designed to serve a US$2bn pulp mill that Portuguese pulp and paper firm Portucel Soporcel is reportedly considering building in Uruguay.

Lula expressed interest in the project and said Brazilian firms could take part in its construction, according to the official. This would enable the port's developer to access financing from Brazil's national development bank BNDES.

The Brazilian president's interest will also increase Uruguay's chances of obtaining support from the Mercosur structural convergence fund Focem, said the official.

Mujica is also looking to promote the project in other countries in the region to attract Latin American firms, as well as additional financing alternatives, the official added.

In the meantime, the government has to carry out further technical studies before it can set a more precise price-tag, local paper El País reported.

The deepwater port is expected to be concessioned, but the government might provide some kind of subsidy, the official said.

If carried out, the port would become a major component of a bi-oceanic corridor that connects Uruguay to Chile's central coast and would also have a positive impact on another project of regional significance: the construction of a low-altitude railway connecting central Chile and Argentina, added the official.