Itaipú Treaty Revision Marked by Uncertainty and Lack of Transparency

As Paraguay marks 53 years since the signing of the Itaipú Treaty, a cloud of uncertainty and a concerning lack of transparency hangs over the crucial revision of Annex C. From our vantage point at ABC Color, we observe that the current administration under President Santiago Peña appears to be navigating these complex negotiations without a clear roadmap. Former head of the National Electricity Administration (ANDE), Ing. Pedro Ferreira, has voiced strong concerns, warning that the government is negotiating terms that could irrevocably bind Paraguay for decades to come, all while time is running out and Brazil's interests seem to be prioritized.

Ing. Ferreira has characterized the government's approach as one of "sterile arrogance," noting the absence of public proposals and a failure to consult with legislative or partisan sectors. "A government that is leaving in just over 2 years believes it has the legitimacy to secretly negotiate conditions that will prevail for decades," he stated, highlighting the administration's systematic failure to meet its own timelines. The deadline for defining the new tariff structure, initially set for December 2024 and then postponed to mid-2025, leaves Paraguay unprepared for the January 2027 deadline, when the energy tariff could drastically decrease, primarily benefiting Brazil.

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A government that is leaving in just over 2 years believes it has the legitimacy to secretly negotiate conditions that will prevail for decades.

Furthermore, significant issues plague Paraguay's technical preparedness to utilize its 50% share of Itaipú's energy. Delays in essential infrastructure projects, such as the 500 kV line to Valenzuela, severely limit domestic consumption capacity. This is compounded by contradictory energy pricing policies: residential consumers face projected price hikes, while specific sectors receive preferential rates. "It is difficult to convince a potential consumer to pay 50 when at the same time we deliver to Argentina at 28 and offer certain energy-intensive industries at 30 for 15 years," Ing. Ferreira emphasized, pointing out that such inconsistencies deter investments crucial for national development.

The prospect of selling surplus Itaipú energy directly to the Brazilian market, a point often highlighted in official discourse, appears less optimistic than portrayed. The viability of this hinges entirely on the approval of the new Annex C by both countries' parliaments—a bureaucratic process that, based on past experiences, could take years. At ABC Color, we believe that transparency and robust public debate are essential for securing Paraguay's energy future. The current lack of both is deeply troubling and risks undermining the nation's strategic interests in the long term.

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It is difficult to convince a potential consumer to pay 50 when at the same time we deliver to Argentina at 28 and offer certain energy-intensive industries at 30 for 15 years.