Paraguay will have access to 100 percent of Itaipu power in July leading to true energy sovereignty

Paraguayan President Mario Abdo Benítez announced yesterday, Tuesday, that his country will be able to withdraw 100 percent of the energy it is entitled to by treaty from the Itaipú Hydroelectric Power Plant, shared with Brazil, as of July of this year.

This unprecedented event will be made possible by commissioning the 500 KV (Kilovolt) electrical substation built in the city of Yguazú, department of Alto Paraná, which will enable the country to have the capacity to dispose of some 8,000 watts of energy.

“The completion of this project will mean true energy sovereignty for the country since it will make available to the Paraguayan economy those resources that until now have not been available to the industrial sector”, said the Paraguayan president during an official act.

The interpretation of the agreement between Brazil and Paraguay that has prevailed since it was signed obliged Paraguay to sell the electricity it does not use to Brazil, generally at lower market prices.

Half a century after it was signed, and with the debt for its construction recently paid off, Paraguay was trying to re-discuss parts of the agreement, historically considered more beneficial to Brazil and detrimental to Paraguayan economic interests.

Last month, an agreement reached between Brazil and Paraguay will generate an additional cost in the electricity bill of R$1.9 billion (US$380 million) to Brazilian consumers.

The amount is related to the new tariff of Itaipu, of approximately R$85 (US$16.82), which increased the operating expenses from just over R$5 billion in 2022 to R$7.6 billion this year.

Until 2021, operating expenses had been stable, at about R$3.8 billion per year.

Abdo Benítez emphasized that Paraguay is the world’s largest per capita producer of clean and renewable energy through the use of the Paraná River but acknowledged that this would be of no use if this energy is not available to all the country’s inhabitants.

He said that for that reason, it would be indispensable to continue investing in energy infrastructure works and announced a new project for constructing a 220 KV transmission line for the Paraguayan Chaco, which will be submitted to Congress for approval.

“This will require the approval of a US$126 million loan from multilateral agencies, and its construction will take two years”, he detailed.

For his part, the president of the National Electricity Administration (ANDE), Félix Sosa, commented that in addition to the work on the Yguazú substation, a new 500 KV, the double-terminal transmission line was built from the Margen Derecha substation (Paraguayan side) of Itaipú to connect with the new substation, with a total length of 40 kilometers.

He explained that the two works require an investment of approximately US$103 million, financed with funds from a loan from the Development Bank of Latin America (CAF) and a component of ANDE’s funds.