New ANDE head acknowledges regulatory hurdles deterring investors

Miguel Báez Reyes, the newly appointed president of Paraguay's National Electricity Administration (ANDE), has openly addressed significant obstacles hindering foreign investment in the country's energy sector. During his official presentation, Báez revealed that President Santiago Peña specifically instructed him to resolve regulatory ambiguities and the absence of clear guidelines that currently impede capital inflow.

Báez, who previously served as the state company's technical manager before retiring two years ago, stated that investors often encounter unclear regulations or impediments when they arrive. He emphasized President Peña's directive to "untangle" these issues, establish clear criteria, and implement transparent regulations. This marks a critical, self-critical assessment of the current state of ANDE.

The new ANDE chief highlighted that the institution holds approximately 5,000 MW in project proposals and inquiries from interested companies. However, these potential investments are stalled due to the lack of an agile and predictable regulatory framework. The presidential order aims to meticulously review each request, prioritizing projects that generate local employment and stimulate the economy, while strictly avoiding concessions detrimental to public finances.

This push for regulatory clarity comes amidst the turbulent aftermath of the previous administration. ANDE's rigorous evaluation of contracts will be tested by large-scale ventures demanding preferential energy rates. A notable case involves Atome, whose executives threatened to abandon a $665 million green fertilizer plant project if ANDE does not approve an initially agreed-upon tariff of $30/MWh for 15 years. While a revised, higher tariff proposal was made, it still falls below the current technical rate of $44/MWh.

“

Our president of the Republic travels, promotes the country and wants to bring investments. What is seen in these last times is that investors come and find that there is no clear regulation or there is some type of impediment. The president spoke to me specifically to try to untangle that, define clear criteria and transparent regulations.