Angry Paraguay rejects Brazil’s proposal on Itaipu hydroelectric plant

RIO DE JANEIRO, BRAZIL – Paraguay’s Foreign Minister Euclides Acevedo stressed that negotiations with Brazil on the Itaipu binational dam have stalled because the proposals of Jair Bolsonaro’s government are unacceptable.

The statement issued by the Paraguayan Foreign Ministry claims that Brazil’s proposals harm the interests of the National Electricity Administration (Ande) and thus the Paraguayan nation.

At the latest, since Brazil’s Foreign Minister Paulo Guedes awkwardly said about 14 days ago that “Paraguay became practically a Brazilian state without taxes, it grew and became richer because it benefits from the Brazilian scale by exporting to Brazil,” Paraguayans are angry.

“Brazil not only wants to lower the tariff, but at the same time it wants to review the ANDE agreement with Eletrobras, and that is inadmissible,” Foreign Minister Acevedo told local media.

He also stressed that the Electricity Administration is obliged to defend its interests and is the only one authorized to manage the energy generated by Binational Itaipu.

The Foreign Minister stressed the need to take away the idea of nationalizing the company from those who harbor such ambitions and stressed the need to strengthen the national electricity system further.

“We must ask the industrialists for an agreement with the state to have an infrastructure plan and in this way to use the energy generated because the energy that is ours must be used,” said Acevedo.

It is worth noting that Itaipú, fed by the waters of the Paraná River, is one of the largest hydroelectric plants in the world and one of the largest in terms of energy production, along with the Three Gorges Dam on the Yangtze River in China.

DISPUTE OVER ELECTRICITY TARIFFS

The Itaipu Dam, the second-largest hydroelectric dam globally, is located on the Paraná River on the border between Brazil and Paraguay.

Completed in 1984, it is a binational undertaking run by Brazil and Paraguay. The reservoir ranges from Foz do Iguaçu in Brazil, and Ciudad del Este in Paraguay, in the south to Guaíra and Salto del Guairá in the north. The installed generation capacity of the plant is 14 GW.

Of the twenty generator units currently installed, ten generate at 50 Hz for Paraguay, and ten generate at 60 Hz for Brazil.

Since the output capacity of the Paraguayan generators far exceeds the load in Paraguay, most of their production is exported directly to the Brazilian side, from where two 600 kV HVDC lines, each approximately 800 kilometers (500 mi) long, carry the majority of the energy to the São Paulo/Rio de Janeiro region where the terminal equipment converts the power to 60 Hz.

The concept behind the Itaipu Power Plant resulted from negotiations between the two countries during the 1960s. The “Ata do Iguaçu” (Iguaçu Act) was signed on July 22, 1966, by the Brazilian and Paraguayan Ministers of Foreign Affairs, Juracy Magalhães and Raúl Sapena Pastor, respectively.

This was a joint declaration of the mutual interest in studying the exploitation of the hydro resources that the two countries shared in the section of the Paraná River starting from, and including the Salto de Sete Quedas, to the Iguaçu River watershed. The treaty that gave origin to the power plant was signed in 1973.

The terms of the treaty, which expire in 2023, have been the subject of widespread discontent in Paraguay. The government of former President Lugo vowed to renegotiate the treaty’s terms with Brazil, which long remained hostile to any renegotiation.

In 2009, Brazil agreed to a larger electricity payment to Paraguay and allowed Paraguay to sell excess power directly to Brazilian companies instead of solely through the Brazilian electricity monopoly Eletrobras.