Brazil and Paraguay at loggerheads over Itaipu dam tariff

The right bank (Paraguayan side) of the Itaipu Binational Entity denied this Tuesday through an official press document, the tariff reduction for 2023, announced by Brazil the day before.

Itaipu Binacional is a state-owned hydroelectric dam on the Paraná River located on the border between Brazil (Paraná state) and Paraguay. It is one of the main generators of national energy in Brazil.

According to the document, the technical committee is still analyzing the budgetary bases and their components, which are vital in defining the new selling price of the electricity service that will be in force next year.

The Itaipu right margin made such a statement after the Brazilian government announced on Monday a reduction on a provisional basis of Itaipu’s tariff for the year 2023, of 38.9 percent, that is, from 20.75 dollars to 12.67 dollars per kilowatt (kW).

In this sense, he pointed out that the anticipated communication made by the left margin of the Binational obeys the estimates produced by its technical team based on the reduction of the debt contemplated in Annex C of the Treaty.

However, so far, there is no definition, remembering that both margins must agree on the value of the tariff for the year 2023 and cannot make a unilateral decision.

He added that to date, they are still discussing the budgetary bases for the tariff valuation, which according to the position of the Paraguayan side, should be maintained at the current levels of 20.75 dollars per kilowatt/month.

“In this sense, it is made known that what was communicated by the Brazilian side cannot be considered as a reduction of the tariff for Itaipu Binacional,” the published document emphasized.

In this regard, the Paraguayan director of Itaipu, Manuel Maria Caceres, told local media this Tuesday that Brazil’s decision was inconsistent with the Paraguayan government.

“The publication of the tariff by Brazil is an internal decision, and that does not mean that there is an agreement, so it does not affect the tariff,” he expressed.

He also affirmed that Paraguay would not yield in its position in the negotiation on the price of energy with Brazil since the right margin intends to keep the tariff as high as possible.

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