Itaipú: Proposal to sextuple compensation and create trinational holding with Brazil and Argentina

A groundbreaking proposal has emerged, urging the Paraguayan government to adopt a bold strategy for the revision of Annex C of the Itaipú Treaty. This analysis, developed by seasoned energy specialists, advocates for a paradigm shift from a reactive stance to one of proactive leadership, centering on human dignity and industrial development. The core of the proposal lies in migrating towards a binomic tariff system for the Itaipú Binacional hydroelectric plant.

This innovative model would bifurcate exploitation expenses from direct state benefits, potentially allowing Paraguay to demand an increase of up to six times, or even a dynamic compensation indexed to the Brazilian market reaching nine times the current values. Such a move could secure an average revenue flow of over $20.5 billion for Paraguay by 2040. Simultaneously, it promises to lower energy costs for the national electric utility (ANDE) to below $30/MWh, bolstering the competitiveness of Paraguayan industry, while Brazil could see its operational costs decrease to below $50/MWh.

Beyond financial gains, the proposal envisions a geopolitical "Zooming out" strategy: the creation of a Trinational Paraná Hydroelectric Holding. This consortium, with proposed stakes of 50% for Paraguay, 30% for Brazil, and 20% for Argentina, would not only coordinate the operation of Itaipú and Yacyretá but also spearhead the development of crucial pending projects like Corpus Christi and Itatí Itacorá, alongside installing navigation locks at Itaipú. This unified hydroelectric complex would serve as the linchpin for energy integration in the Southern Cone, enabling flexible energy distribution based on demand and economic viability across the three nations' electrical systems. This vision represents a significant opportunity for Paraguay to assert greater control over its energy resources and drive regional development.