Controversy in Paraguay over potential reduction in energy tariffs to Brazil

RIO DE JANEIRO, BRAZIL – Itaipu Binational’s Board of Directors, meeting this Friday (29) in Hernandarias (southeastern Paraguay), may decide to reduce the tariff applied to Brazil to buy energy from the current US$54 per megawatt/hour to US$47, denounced the opposition to the governmen of President Mario Abdo Benítez.

“If these detrimental acts of treason are perpetrated, Paraguay is going to lose again at the negotiating table. Brazil will impose its unconditional demands and in 2023 we will have little left to negotiate because the ‘status quo’ is in Brazil’s interest,” said deputy Kattya González of the Partido Encuentro Nacional (PEN, center-left).

In a statement in Congress alongside her colleague Norma Camacho, Parlasur deputy Ricardo Canese and former vice-minister of Mines and Energy Mercedes Canese, González wore the jersey of the Paraguayan national soccer team covered by a jersey of Brazil and asked the “sell-outs” to defend the “white and red flag.”

“They are once again going to breach the conditions established in the Foz de Iguazu Treaty, where it is stated that the price of the energy generated in Itaipu must be fair,” the deputy added, denouncing the “obscurantism” of the Paraguayan authorities.

Meanwhile, Ricardo Canese denounced that Paraguay could lose US$168 million if this tariff reduction materializes, while noting that the country “is currently supplying energy below the real market price.”

For his part, the Paraguayan director of the Itaipu power plant Manuel María Cáceres said during a press conference with National Electricity Administration (ANDE) president Félix Sosa, that negotiations on the tariff are ongoing, and that the price will not be defined at this Friday’s meeting.

He said that these talks are currently at the technical stage, after which they will be passed to the Board of Directors to be analyzed, stressing that the tariff for 2022 is not scheduled to be analyzed this Friday.

According to the authorities, another component to be included in the tariff calculation is the financing of works in both countries. In that respect, Sosa explained that there are investments planned for the electrical system for 2022 amounting to US$140 million.

The Itaipu Binational Dam is the world’s largest hydroelectric dam by production volume and the Benítez government has been facing accusations by the opposition of secret clauses and obscurantism in negotiations between the parties.