The president of Paraguay, Santiago Peña, stated in an interview with CNN this Monday (19) that he will sign an agreement with Brazil for the guidelines of the so-called “Annex C” of the Itaipu Treaty in 2026, but questioned the possibility of reducing consumer tariffs.
A preliminary agreement between Paraguay and Brazil provided that, from 2026, the value of the energy tariff from the binational hydroelectric plant would only consider the plant’s operating costs, remaining between US$ 10 and US$ 12 per kW/month. Today the figure on the Brazilian side is US$17.66, made possible by a contribution from Itaipu.
Penã argued that Itaipu is a development factor for both countries — but especially for Paraguay. The president argues that the money from tariffs can be used for structural works and to expand energy production.
“We have to think about how to supply more electricity. Itaipu needs to continue generating electricity, it is a development project for Brazil and Paraguay. The discussion is: what is the project for 50 years?”, he asked.
“Are we going to have a small vision of just reducing the tariff a little or are we going to look to the future? The issue is not simplistic, it is more comprehensive. We need to discuss the expansion of energy production. And if there is the possibility of reducing the price, we are also open to that, especially because it also benefits Paraguayans”, he added.
The Itaipu Treaty was signed in 1973 and provided for a review of “Annex C”, which deals with the plant’s financial bases and the rules for pricing and providing electricity services.
One of the compensations for the Paraguayans provided for in the preliminary agreement is the release for them to sell their surplus energy on the Brazilian free market, generating price competition.
