PARAGUAY · ENERGY
Key Facts
- —What is happening The US government announced on Wednesday, 21 October that US firm Crusoe and Paraguayan developer Araico finalised a partnership for high-performance AI computing powered by the Itaipu dam, with a first deployment planned for mid-2027.
- —Why it matters The announcement ties a US artificial intelligence project to Itaipu, a plant that Paraguay and Brazil own equally, while the treaty rules on pricing and selling its power are still under renegotiation.
- —The numbers Itaipu has 14,000 MW of capacity and supplies about 90% of Paraguay’s electricity. No power or investment figure was announced for the Crusoe project, while Araico’s own campus plan cites US$12 billion.
- —Who is who Crusoe is a US builder of AI computing sites, Araico is a Paraguayan energy and infrastructure developer, and Christopher Landau is the US Deputy Secretary of State who visited Asunción.
- —What to watch Whether Paraguay’s state power utility ANDE signs a supply contract and a tariff for data centres, and whether Brazil and Paraguay conclude the long-delayed revision of the treaty’s Annex C.
- —Power Index Paraguay ranks 10th of 14 in The Rio Times Latin America Power Index, with 36.0 points (October 2026 edition).
- —What it means for you For US readers, a US firm is positioning AI computing for customers in the US and Latin America on South American hydropower, but no contract terms, price or capacity are public yet.
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Washington says Crusoe and Araico will build AI computing on Itaipu power in Paraguay. Its statement does not mention Brazil, the dam’s co-owner.
The US State Department said on Wednesday, 21 October that a US firm will build a Paraguay AI hub. The site is to run on power from the Itaipu dam, which Paraguay shares with Brazil.
Crusoe, a US AI infrastructure firm, and Araico, a Paraguayan energy developer, finalised the partnership. Crusoe plans an initial deployment in mid-2027, the department said.
What the State Department Announced
The news came on the last day of Deputy Secretary of State Christopher Landau’s trade visit to Asunción. He met President Santiago Peña and Foreign Minister Rubén Ramírez Lezcano during the 19 to 21 October visit.
The department’s release says Crusoe and Araico finalised a partnership to build high-performance infrastructure powered by Itaipu. It calls the project potentially one of the largest private investments in Paraguay’s history.
Gazeta do Povo notes that no capacity, contract volume or investment figure was released. It also notes that the statement does not mention Brazil.
The same release lists a US$12 million uranium investment by Uranium Energy Corp in Paraguay. It also announces US$5.5 million for counterterrorism work and US$6.25 million in security aid against organised crime.
Landau and Peña toured the Itaipu dam on Wednesday, the news agency account carried by Infobae says. Landau called the visit a dream and said he lived in Paraguay from 1972 to 1977, when his father was ambassador.
A Private Deal, Not a US Purchase
The reports describe a partnership between two private companies, announced by Washington. They do not describe any purchase of Itaipu power by the US government.
Itaipu is owned equally by Brazil and Paraguay under a 1973 treaty, and each is entitled to half of its output. Energy that one country does not use can be bought by the other, Gazeta do Povo explains.
Itaipu Binacional lists 14,000 MW of capacity from 20 units of 700 MW each, running since 1984. It says the plant supplies about 90% of Paraguay’s consumption and about 10% of Brazil’s.
Paraguay’s unused share has long gone to Brazil, about 10,670 GWh in 2025 by the Asunción Journal’s estimate. Araico argues that this power should instead be turned into computing inside Paraguay.
What Araico Says It Is Building
Araico, co-founded by Alejandro Zuccolillo and Nicolás Arrellaga, has promoted a campus called Iguazú AI City at Yguazú, in Alto Paraná. It cites a headline investment of US$12 billion.
Zuccolillo told ABC Color on 30 September that the first stage is 6 MW, due in December 2026. Two later stages of about 130 MW each would follow in 2028 and 2029, costing US$5.5 billion each.
He said Araico would pay US$45 per MWh at first, rising 2.5% a year or with US inflation, whichever is higher. A megawatt hour is the energy of one megawatt used for one hour.
ANDE, the state power utility, says no tariff exists for this kind of load, ABC Color reported. ANDE’s president did not answer the paper’s questions.
Capacity figures differ between outlets, from about 280 MW at ABC Color to a planned 1.3 GW at the Asunción Journal. A column in Última Hora on 18 October says Zuccolillo names Crusoe as a client and strategic ally.
Why Brazil Is Part of the Story
Annex C is the treaty section that sets the plant’s capital costs, royalties and tariff, Gazeta do Povo explained in 2025. ANDE says a data centre tariff depends on a new Annex C, still unsigned, the Asunción Journal reported on 30 September.
Secretary of State Marco Rubio told senators in May 2025 that surplus Itaipu power could host AI sites, La Nación reported. Brazilian experts replied that neither country can use Itaipu power as it wishes.
Edvaldo Santana, a former director of regulator Aneel, said a new accord would be needed, ABC Color reported in May 2025. No Brazilian government reaction to the 21 October announcement appeared in the reports reviewed.
What It Means for US Readers
If built as announced, the project would give US cloud customers computing capacity powered by hydropower in South America. A column in Última Hora says lawmakers in 16 US states are weighing data centre bans or pauses.
Investors should note that no contract, price or capacity is public, and the treaty questions with Brazil are unresolved. The reports name no end customer.
Earlier reports cover Landau’s security deals, the US-trained anti-terror unit and why US AI capital is choosing Paraguay over Brazil. The Itaipu dam explainer, the Paraguay hub and the Brazil hub give wider context.
What Is Not Known
The release does not say whether Crusoe’s mid-2027 deployment is the Araico campus at Yguazú or a separate site. It gives no megawatts, no contract volume and no investment figure.
It is not known who would supply the power, since ANDE says no data centre tariff exists yet. Brazil’s position on this use of Paraguay’s share of Itaipu is not stated.
Araico’s US$12 billion, 6 MW and US$45 per MWh figures are the company’s own claims. ANDE has not confirmed them, and its president did not reply to ABC Color.
What Comes Next
Araico says it will energise its first 6 MW in December 2026, and Crusoe’s initial deployment is due in mid-2027. A supply contract between Araico and ANDE has been described as imminent since late September.
This does not mean that Itaipu’s ownership or the treaty’s 50-50 split has changed. Nothing in the reports reviewed says Brazil has lost any share of the plant.
Frequently Asked Questions
What did the US announce about Itaipu?
The US State Department said on 21 October that Crusoe and Araico finalised a partnership for high-performance infrastructure powered by Itaipu. Crusoe plans an initial deployment in mid-2027.
Is the US government buying Itaipu power?
The reports describe a partnership between two private companies, Crusoe and Araico. They do not describe a purchase by Washington.
Who owns the Itaipu dam?
Brazil and Paraguay own Itaipu equally under a 1973 treaty, and each is entitled to half of its output. The plant has 14,000 MW of capacity.
How big is the Paraguay AI hub?
The US release gives no capacity or investment figure. Araico’s own campus plan cites US$12 billion, a claim ANDE has not confirmed.
Has Brazil reacted to the announcement?
No Brazilian government reaction appeared in the reports reviewed. The US statement does not mention Brazil.
Sources: US State Department, U.S.-Paraguay Cooperation to Advance Prosperity and Security, 21 October; Gazeta do Povo, 21 October; Infobae, 21 October; ABC Color, 30 September; Asunción Journal, 30 September; Última Hora, 18 October; Itaipu Binacional; La Nación, 21 May 2025; ABC Color, 24 May 2025; Gazeta do Povo, 28 September 2025 (all accessed 22 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief