Paraguay Energy in English

Negotiations over one of the largest private investments in Paraguay's recent history remain unresolved, with the electricity tariff as the single decisive sticking point. UK-based Atome PLC, the state utility ANDE, and the Ministry of Industry and Commerce continue talks over the company's planned USD 665 million green-fertilizer plant in Villeta, which would create some 4,000 direct jobs. Electricity accounts for more than 80% of Atome's operating costs, making the power price the determining factor for viability. Atome seeks a fixed tariff of USD 30 per MWh, frozen in dollars, to unlock roughly USD 420 million in loans backed by a consortium including Hy24, IFC/GCF, DEG and Sudameris, with debt support from BID Invest, FMO and the European Investment Bank. 'The shareholders and lenders remain open to dialogue to avoid a historic and emblematic private investment falling through,' said James Spalding, Atome's representative in Paraguay, who stressed the company still lacks a formal proposal from ANDE. The utility argues a frozen tariff is financially unviable given expected increases in generation costs. A resolution in the coming weeks will determine whether Paraguay secures the landmark foreign direct investment or risks seeing the capital redirected elsewhere.

ANDE president Félix Sosa led a technical meeting with the World Bank and the Vice Ministry of Mines and Energy to advance the tender for Paraguay's first utility-scale photovoltaic plant, a 140 MW facility to be built by the private sector in Loma Plata, Boquerón Department, in the Chaco region. The session presented technical adjustments to the bidding terms, drawn from feedback gathered at a 1 June public hearing and developed with World Bank support. The World Bank mission included energy specialists Lucía Spinelli and Florencia Balestro and consultant Mario Vignolo. The project, representing a USD 140 million private investment, is the first major generation initiative under Paraguay's new Renewable Energy Law (Law 7599/2025) and aims to diversify a generation matrix historically dominated by hydropower. Officials framed the tender as a step toward a transparent, technically grounded procurement process and a more reliable, diversified national grid.

A government push to grant preferential electricity tariffs to electro-intensive industries has triggered one of the most sensitive energy-policy debates in Paraguay in years. Although President Santiago Peña ultimately repealed the decrees regulating the new tariff regime for so-called 'convergent industries,' the controversy remains live. The Executive argues that competitively priced power is essential to attract billion-dollar investments in data centers, AI, green hydrogen and e-mobility, monetizing the Itaipú surplus domestically rather than exporting it cheaply; ANDE president Félix Sosa has defended the initiative. Critics, including former ANDE presidents, engineers and civil-society groups, warn the incentives amount to indirect subsidies financed by all citizens. Former ANDE head Pedro Ferreira cautioned that long-term contracts could lock in prices below what the utility should earn for strategic energy. The debate is sharpened by a stark contrast: ANDE acknowledges that roughly 350,000 low-voltage customers carry five or more unpaid bills, prompting a new edition of its Ñande Ahorro program offering interest-free refinancing over up to 60 installments. The repeal did not settle the question, which is expected to resurface as the government revives its strategy to capture electro-intensive industry.

Industry and Commerce Minister Marco Riquelme argued that attracting large industrial investment to Paraguay requires the government to make 'concessions', such as the favorable power tariff sought by UK firm Atome to build a fertilizer plant worth more than USD 600 million. The comments came a day after the Executive repealed two decrees regulating ANDE's tariffs and contract terms for high-consumption convergent and green-hydrogen industries, amid union protests over Atome's bid for power at a fixed USD 30/MWh for 15 years, well below rates for other industries. Riquelme said the repeal aimed to safeguard 'a healthy environment for receiving investors.' He warned that 'Atome is not the only hydrogen project circulating; there are 15 projects that have already made investments and are all at risk.' Globally, he said, attracting major investment requires concessions via energy pricing, fiscal incentives, or infrastructure, justified because green hydrogen changes a country's 'economic matrix' and would cut Paraguay's dependence on fertilizer imports; he cited Uruguay's pulp mills as precedent. Atome's USD 665 million plant is planned for Villeta. ANDE can keep negotiating, but if the firm holds firm at USD 30/MWh, 'we will have to say goodbye to this project,' Riquelme said, adding he is confident 'others will come that can be a bit more flexible.'

In an op-ed, industrial-projects consultant Pablo Galotti argues that Paraguay is quietly building a regionally competitive industrial platform on a rare combination of macroeconomic stability, abundant renewable energy, a competitive tax regime, and a strategic central location in South America. Historically reliant on agriculture and commodity exports, the country is shifting toward a more industrialized structure, with the maquila regime driving investment in auto parts, metallurgy, aluminum, textiles, plastics, and processed foods aimed at Brazil and Argentina, alongside growing interest from data centers, AI, electro-intensive industries, and energy-transition projects. Galotti calls energy availability Paraguay's key differentiator, not only Itaipu and Yacyreta but also strong solar potential, noting that 2026's regulation of the non-conventional renewables law has enabled private investment in solar, wind, cogeneration, and green hydrogen, while rising industrial demand sets a clock for transmission, distribution, and grid modernization. He highlights Paraguay's position at the geographic center of the continent, linking Atlantic and Pacific markets via bioceanic corridors and the Paraguay-Parana Waterway. He sees the next industrial leap across five sectors: green hydrogen and synthetic fuels; data centers and AI; metallurgy and steel; advanced agro-industry; and the Bioceanic Corridor, which could turn the Paraguayan Chaco into a new logistics and industrial hub for South America.

Paraguay's government on Tuesday repealed two decrees that had set low electricity tariffs to incentivize so-called 'convergent industries', high-consumption sectors including artificial intelligence and data centers, though it confirmed an existing contract with UK firm Atome remains valid. Civil Cabinet Minister Javier Gimenez said President Santiago Pena decided to render ineffective decrees 5860 and 5861 from last April. 'This decision is a directive for ANDE to fulfill the complex strategic mission of, on one hand, balancing its finances and strengthening itself and, on the other, maintaining the competitiveness and conditions needed to attract industry,' Gimenez said, appearing alongside ANDE president Felix Sosa and Industry and Commerce Minister Marco Riquelme. The move followed protests by ANDE workers against preferential tariffs for Atome, which plans to open an ecological fertilizer plant in 2028. The union (Sitrande) said the decrees would have given Atome power at USD 30 per MWh for 15 years, versus what it called ANDE's roughly USD 44/MWh 'technical tariff.' Sosa countered that Atome signed its contract in 2022 and that its tariff of 'approximately 33 dollars' per MWh at 220 kV continues despite the repeal: 'Atome does not have a contract signed under these decrees; it continues with the same contract.'

Paraguay's Chaco region is emerging as the country's leading hub for photovoltaic solar development, driven by self-consumption, distributed generation, and a new regulatory framework. In May, Decree No. 6034 took effect, regulating Law No. 7599/2025, which modernizes the regime governing non-conventional, non-hydro renewable energy (ERNC). Vice Minister of Mines and Energy Mauricio Bejarano said the law lets renewable generators sell power to state utility ANDE, export it, sell to large consumers, or use it for self-consumption: 'The commercial flexibility is quite broad and opens greater investment possibilities; a clear example is the Chaco.' An estimated 14 MW is already installed across Mennonite colonies and some industries, while many rural establishments use solar panels for water pumping, irrigation, and self-supply. Growth is fueled by falling PV costs and the drive to replace diesel in off-grid areas, where Mennonite colonies alone spent roughly USD 2 million annually on diesel. Bejarano said ANDE will soon launch a 140 MW international solar tender, while its Master Plan envisions roughly USD 9 billion in generation investment. He cautioned that solar cannot guarantee system firmness on its own but will be a key component of the future energy mix, complementing hydropower and prospective natural gas projects. 'Energy is probably the most precious commodity in the world today, and Paraguay has that potential,' he concluded.

Industrial and electricity sector leaders in Paraguay are positioning the newly signed Taiwan AI partnership as the catalyst the country needs to finally accelerate investment in new generation sources, particularly non-hydro renewables such as utility-scale solar. The bilateral project will start with a 10 MW data center pilot, representing approximately USD 300 million in investment and a marginal impact on the national grid, but is designed to scale to 100 MW in a second phase and, eventually, 1 GW, which would make it among the largest AI compute facilities in the world. This megaproject is the perfect opportunity to accelerate investments in new sources of energy generation, industry executives told La Nacion, framing the deal as a forcing function for grid expansion rather than a constraint on it. The arrangement pairs Paraguay's 100% renewable electricity matrix, anchored by Itaipu, Yacyreta and Acaray, with Taiwan's dominance in advanced semiconductors, where Taiwanese fabs supply roughly 90% of the world's leading-edge chips. Crucially, the memorandum of understanding explicitly includes a feasibility study on new energy sources, with Mitic Minister Gustavo Villate confirming that scalability analysis for non-hydro generation is built into the project's first phase. ANDE President Felix Sosa has acknowledged that supporting the project in its later stages will require strengthening the utility's musculatura: its transmission backbone, industrial tariff structure, and complementary non-hydro generation portfolio. For investors, the practical takeaway is that the Taiwan deal is now functioning as a flagship anchor demand contract that can unlock long-tenor financing for solar parks, transmission upgrades, and battery storage, leveraging the 30-year contract terms enabled by Law 7599/25 on non-conventional renewables.

Electrical engineer Guillermo Krauch has issued a sharp warning that Paraguay's electricity consumption is growing several times faster than the official projections used by state utility ANDE for its investment planning, raising the risk of a severe energy crisis as early as 2029. Consumption rose 21.0% year-over-year in the first four months of 2026, climbing from 10,087.9 GWh to 12,204.3 GWh, with April alone posting a 35.4% jump to 2,643.2 GWh versus April 2025. Krauch attributes the acceleration primarily to two new electrointensive demand sources: cryptocurrency mining operations and AI-related data center projects, which together are pushing demand growth between three and four times above ANDE's baseline forecast. The shortfall is also structural on the capital side. ANDE's Master Plan calls for roughly USD 600 million per year in infrastructure investment over a decade, but actual outlays have run only USD 300-340 million annually in recent years, creating a cumulative gap that compounds with every quarter of double-digit demand growth. Paraguay's electricity consumption is increasing considerably and much more than predicted by ANDE in its forecasts and investment plans, Krauch told La Nacion. The expert noted that without faster capital deployment, expansion of non-hydro generation, and reinforcement of transmission corridors, Paraguay could lose its competitive advantage as a destination for AI data centers and other clean-energy-seeking industries by the end of the decade. For investors and policy makers, the message is a cautionary counterweight to the optimistic narrative around the Taiwan AI partnership: the demand-side opportunity is real, but supply-side execution must accelerate sharply.

Paraguay's government is reframing its long-standing hydro surplus as a digital export rather than a wholesale electricity export, positioning the country as a regional artificial intelligence hub. Currently, the bulk of Itaipu Binational output not consumed domestically is ceded to Brazil at treaty-bound prices well below market rates, a structural source of value leakage that successive administrations have struggled to close. The new strategy, articulated by Minister of Industry and Commerce Marco Riquelme, would route that surplus into AI data centers and high-performance computing facilities sited inside Paraguay, capturing the value-added margin of digital services rather than commodity power. Riquelme argued Paraguay holds two competitive advantages that hyperscalers and AI infrastructure investors increasingly prize: a 100% renewable electricity matrix anchored by Itaipu, Yacyreta and Acaray, and an expanding fiber connectivity backbone. The pivot is anchored by the recently signed Paraguay-Taiwan memorandum of understanding to build a sovereign AI compute center, pairing Taiwanese semiconductor expertise with Paraguayan clean power. For policy and investment audiences, the announcement signals a meaningful inflection point: Paraguay is publicly committing to capture downstream value from its generation surplus, not just to negotiate higher cession prices with Brazil. Execution risk remains significant, including the need for transmission build-out, regulatory clarity on industrial tariffs, and competition from Chile, Brazil and Uruguay for the same hyperscaler workloads, but the strategic narrative has now been formalized at the cabinet level and tied to a concrete bilateral instrument.

ANDE President Félix Sosa says the utility has the infrastructure capacity to support Paraguay's explosive growth in electricity demand and to back the recently signed Taiwan-Paraguay AI center agreement. Paraguay has 8,760 MW of installed capacity across Itaipú, Yacyretá and Acaray, against a January 2026 peak of 5,752 MW, leaving meaningful short-term headroom. About 1,000 MW of contracted cryptomining demand expires in December 2027 and could be reallocated to new uses. Sosa highlighted that consumption rose 50% over the last three years and 20% so far in 2026, and confirmed ANDE is preparing its first energy procurement tender alongside a Public-Private Partnership project targeting 1,400 MW of new generation. "ANDE has the electrical infrastructure capacity to support this explosive growth being registered in Paraguay," he stated.

Brazilian Itaipú Director Enio Verri reaffirmed that the tariff for Itaipú-generated electricity could be reduced further starting in 2027, as Brazil-Paraguay negotiations on the binational's pricing structure continue. Since the start of the Lula administration in 2023 the tariff was cut by 30% and frozen through 2026. "What we can say to the Brazilian population is that the tariff of the energy produced by Itaipú for 2027 will be even cheaper than the one charged today," Verri said. He emphasized Itaipú's strategic role as firm baseload in Brazil's grid, complementing growing intermittent solar and wind capacity, and noted Itaipú is investing in floating solar, green hydrogen research, biogas and sustainable aviation fuel. Studies are underway to expand generation capacity and improve current unit productivity to deliver more clean, secure and accessible energy to both Brazilians and Paraguayans.

Paraguay's national electricity consumption rose 21.0% year-on-year during the first four months of 2026, climbing from 10,087.9 GWh to 12,204.3 GWh, according to ANDE data published by state agency IP. April alone marked the highest interannual jump of the period at 35.4%, with demand reaching 2,643.2 GWh versus 1,952.8 GWh a year earlier. Of the cumulative supply, Itaipú Binacional contributed 2,403.3 GWh, the Yacyretá Binational Entity delivered 186.1 GWh, and the Acaray hydroelectric plant added 53.7 GWh. ANDE leadership framed the growth as a stress test for the country's transmission backbone and reaffirmed its commitment to a reliable, efficient, and quality service through strategic technical planning and the execution of priority infrastructure works. The double-digit print intensifies a year-long policy debate over whether Paraguay's hydro-based generation can keep pace with industrial expansion, data center inflows under the new convergent industries decrees, and the prospective Taiwan-backed AI computing center. Industry observers note that the consumption curve is now running ahead of ANDE's own multi-year projections, narrowing the headroom for additional large-load attraction without parallel grid and substation buildout.

Paraguay's government signed a memorandum with Taiwan covering a sovereign AI computing capacity center, a project that Taiwanese President Lai framed as marrying Taiwan's AI technology with Paraguay's abundant green energy. The deal sits inside Santiago Peña's broader push to convert the country's hydroelectric surplus into anchor demand from data centers, crypto-adjacent operators, and now sovereign AI infrastructure. ABC Color reports that the announcement immediately reopened the energy-capacity debate, with the Ministry of Information and Communication Technologies (Mitic) asserting that the system can sustain the new load and that additional generation sources are under evaluation. Independent specialists, however, point to a four-year window before demand outruns installed capacity at the current trajectory, transmission constraints in the metropolitan corridor, and an unresolved tariff renegotiation with Brazil for Itaipú energy. The Taiwan memorandum is structured under Decrees 5860/26 and 5861/26 covering convergent industries and X-energy industries, the same framework that activated ANDE's annually adjusted tariff for data center-scale consumers. Critics in the National Congress argue that fast-tracking foreign hyperscale loads ahead of grid reinforcement risks shifting infrastructure costs onto residential ratepayers.

Paraguay's local consumption of binational hydroelectric output reached just 41% of its theoretical share across Itaipú and Yacyretá in the first quarter of 2026, ABC Color reports, with the Itaipú-only figure even lower at 10.8%. The remainder of the country's contractual share is sold to Brazil under the long-running Paraguayan cession clause, a structure that has become the focal point of bilateral renegotiation. Compared with the same quarter of 2025, ceded volumes fell 19% across both plants combined, a directional win for the Peña administration's stated objective of capturing more local value from binational generation. Analysts cited in the piece attribute the persistent gap to two factors: ANDE's transmission and distribution constraints, which limit the volume the domestic grid can physically absorb, and the absence of industrial loads large enough to soak up the surplus on short notice. The Itaipú tariff fixed at USD 19.28 per kW-month in 2024 expires this year and must be renegotiated, with Brazilian counterparts signaling resistance to material revisions. The article frames the moment as decision-time for Paraguay: invest in grid and substations now to absorb more energy domestically, or continue subsidizing Brazilian industry through low-priced cessions.

Paraguay has approximately four years to move on grid expansion, new generation, and tariff reform before electricity demand outstrips installed capacity, an energy expert told La Nación. The projection layers the 21% year-on-year demand surge from the first quarter of 2026 with the incoming load from convergent industries under Decrees 5860/26 and 5861/26 and the prospective Taiwan-backed AI computing center. Without immediate investment in transmission lines, substations, and non-hydro generation, particularly utility-scale solar and wind, the country risks forfeiting its comparative advantage as a clean-power destination for international capital. The analyst stressed that the policy agenda is sequential rather than optional: the Itaipú tariff must be renegotiated with Brazil this year; the regulations for Law 7599/25 on non-conventional renewables remain unpublished; and ANDE's capex envelope has not been resized to match the new demand curve. The article also notes a regulatory gap around energy storage and demand response mechanisms that, if introduced quickly, could buy time. La Nación's piece is read in policy circles as a public warning shot directed at the executive branch ahead of the next ANDE board cycle.

Paraguay's state electric utility ANDE confirmed that the tariff applied to convergent industries, the regulatory bucket that captures data centers, digital-mining operations, and AI infrastructure projects, will be set in US dollars and adjusted annually using the United States Consumer Price Index. An initial 16.6% upward revision has already been applied to the prior tariff baseline. The change implements provisions of Decrees 5860/26 and 5861/26, the executive's framework for attracting hyperscale electricity consumers to Paraguay's hydro grid. ANDE leadership argues the dollarized, CPI-indexed structure offers investors the rate predictability typically required for ten-to-fifteen year build-out commitments, while still allowing the utility to recover increases in transmission infrastructure costs. Opposition lawmakers and consumer advocates counter that preferential industrial rates could erode ANDE's commercial margin at exactly the moment when transmission capex needs to step up to support the new loads. The article notes that the tariff structure is now central to ongoing negotiations with the Taiwanese counterparts on the AI center and is expected to be a sticking point in the Itaipú tariff renegotiation with Brazil.

ANDE president Félix Sosa confirmed the utility is reverting to overhead cabling in critical Asunción zones, particularly Costanera Norte, after persistent copper-theft attacks on its underground infrastructure. ANDE replaced the underground network in that corridor three times without resolving the issue. Sosa clarified that the recent Costanera Sur outage was triggered by a faulty switch and not by theft. The decision exposes a tension between urban modernization and rampant copper smuggling, which also drains telecom utility Copaco. The reversal arrives as ANDE absorbs a 50% growth in electricity consumption over three years and a 17% surge in Q1 2026 alone, intensifying pressure on transmission and distribution infrastructure already strained by data-center and industrial demand. Sosa noted that "el alto valor del cobre en el mercado negro lo convierte en un imán para los delincuentes."

The Union of ANDE Engineers (UIA) publicly rejected the new regulations issued by President Santiago Peña (Decrees 5860 and 5861, signed April 24, 2026), warning the changes are insufficient and that economic risk to ordinary users remains latent. According to the UIA, Paraguay is close to exhausting its hydroelectric surplus, a situation that will force ANDE to invest in significantly more expensive generation sources to cover future demand. Engineers warn the resulting overcosts must be transferred to the entire user base, industries, commerce and smaller consumers, creating a scheme where ordinary citizens end up subsidizing sectors with limited social return such as cryptocurrency mining and certain data centers. The 2007 Operating Agreement, which has allowed ANDE to sustain low generation costs through priority use of binational surpluses, expires at the end of 2026, and is expected to put strong upward pressure on tariffs in 2027. The UIA is calling for stricter revision of electrointensive tariffs, which it argues remain below the real marginal cost of generation.

The Paraguayan electromechanical construction chamber Cecoel unveiled a package of alternatives to relieve pressure on ANDE's grid, warning that the country's energy surplus could be exhausted within three to four years, with formal shortage scenarios projected between 2030 and 2032. Cecoel's proposals include distributed generation in buildings, systems that allow real-time switching between grid, on-site generation, and storage based on cost and demand; expanded EV charging infrastructure in residential and commercial parking; cogeneration models that let households, firms, and buildings produce energy and inject surpluses into the grid; and nuclear power as a long-term option tied to local plant development. The proposals will be debated at the "Energy and Construction in Paraguay" panel during Constructecnia 2026 on May 21–24 at Conmebol, with private-sector pressure mounting for a regulatory framework that enables decentralized generation.

Paraguay faces an accelerating timeline for the depletion of its hydroelectric surplus, with electromechanical sector specialists warning that the previously projected 2035 horizon could now arrive within three to four years. The shrinking margin has triggered a national debate about generation alternatives that can relieve pressure on the National Electricity Administration (ANDE) grid before scarcity translates into curtailment or import dependency. Experts cited by ABC Color recommend an aggressive push into solar photovoltaic generation paired with battery storage as the most cost-competitive near-term option, followed by biomass, small hydroelectric plants, wind, and eventually natural gas as a transition bridge. Distributed generation in commercial and industrial buildings, combined with self-consumption and cogeneration schemes, is presented as a fast track to expand effective capacity without requiring decades-long binational negotiations. The proposals come amid a 13.1% year-over-year increase in electricity demand during the first two months of 2026, driven by residential, commercial, and industrial consumption, plus rapidly growing demand from cryptocurrency mining and emerging digital infrastructure projects. The discussion underscores a broader inflection point: Paraguay's identity as a clean-energy exporter is colliding with domestic demand growth, and the policy levers required to attract investment in solar, biomass, and storage need to be activated quickly to avoid a structural deficit.

Hours before the 53rd anniversary of the Itaipú Treaty (April 26), the climate around Annex C revision is marked by uncertainty and secrecy from both Paraguayan and Brazilian administrations. The only concrete agreement remains the mid-2024 transitional tariff of USD 19.28 per kilowatt-month, valid through 2024-2026, which also extended ANDE's favorable Operating Convention until end-2026. Analysts warn that Brazilian political pressure aims to keep the tariff low while Paraguay faces a severe ANDE tariff deficit that prevents it from funding investment without sovereign debt. Expert López Flores warns that with the end of the Operating Convention auxilio, the Government must urgently address the ANDE deficit to avoid an immediate hit to its operating costs. The Annex C review, originally scheduled for 2023, remains the unresolved structural issue between the two partners and will determine financial flows to Paraguay over coming decades.

President Santiago Peña signed Decrees No. 5860 and 5861 on April 24, 2026, substantially modifying the controversial January decrees 5306 and 5307 that had granted excessive benefits to cryptocurrency mining, data centers, and hydrogen production sectors. The new tariffs set Very High Voltage (220 kV) peak energy at USD 0.03725/kWh and reserved off-peak power at USD 3.51/kW-month, while Medium Voltage (23 kV) reserved peak power reaches USD 10.84/kW-month. The decision followed a Technical Committee bringing together MIC, MITIC, ANDE, and labor unions, which concluded the previous rates needed adjustment. The move closes a key conflict front with Sitrande, which had described the original tariffs as a robbery of national patrimony. Engineers and technicians had warned that the original benefits subsidized energy-intensive sectors at the expense of common users and Paraguay's hydroelectric surplus.

ANDE inaugurated the new Alto Paraná 220/66/23 kV substation in Ciudad del Este, increasing transformation capacity from 120 MVA to 400 MVA and benefiting over 300,000 customers directly and indirectly. President Santiago Peña attended the ceremony. The USD 26 million investment replaces the previous 120 MVA substation and triples capacity, with availability for 20 lines at 23 kV. The site incorporates a compact-design GIS substation at 220/66 kV, two 80 MVA transformers (220/23 kV) and two 120 MVA banks (220/66 kV). The investment is part of ANDE's USD 350 million 2026 plan to strengthen the grid amid 13.1% demand growth in early 2026 (17.5% Q1 cumulative). Alto Paraná concentrates significant industrial demand including Itaipú-linked consumers, crypto miners and manufacturing. The project is partially financed by CAF and reinforces a strategic triple-frontier corridor.

Representatives of Bolivian steel firm Las Lomas Siderúrgica and a Paraguayan partner conducted technical visits to ANDE's facilities, accompanied by their Paraguay-based CEOs and plant managers from Bolivia. Meetings at ANDE's Commercial Division covered tariffs, supply conditions, available capacity, and procedures for large consumers. The initiative evaluates feasibility of installing steelmaking and manufacturing operations in Paraguay, leveraging competitive tariffs and the clean-energy surplus from Itaipú and Yacyretá. The project could create up to 2,500 direct jobs, adding to the 750 already generated by the meatpacking sector. ANDE officials framed these contacts as part of a national strategy to progressively replace energy ceded unused to Brazil with higher-value-added domestic industrial consumption, a pivot that aligns with Paraguay's broader push for energy-intensive foreign investment.

Paraguayan and Argentine authorities defined key conditions for the Bioceanic Gas Pipeline, a USD 2 billion project designed to channel Vaca Muerta natural gas through Paraguay's Chaco region into Brazil's Mato Grosso do Sul. The project would span over 1,000 km and aims to attract private investment via guaranteed offtake contracts and competitive prices. Technical teams are evaluating whether the pipeline will serve only Paraguay's domestic market or extend into Brazil, positioning Paraguay as a key energy transit and distribution hub in the Southern Cone. Paraguay is advancing specific gas-by-pipeline transport regulations while Argentina evaluates export incentives. Officials see the pipeline as strategic complement to the hydroelectric system, addressing demand growth and the projected 2033 power deficit risk by diversifying Paraguay's electricity matrix beyond hydropower.

A proposal presented to the Paraguayan Government calls for a sixfold (6x) increase in compensation for energy ceded to Brazil, or alternatively a dynamic compensation indexed to the Brazilian market with a ceiling of up to nine times current values. The plan also recommends creating a Trinational Paraná Hydroelectric Holding owned by Paraguay (50%), Brazil (30%) and Argentina (20%), to coordinate operations of Itaipú and Yacyretá and finance pending works including Corpus Christi, Itatí Itacorá and Itaipú navigation locks. Simulations suggest Paraguay would capture an average flow of USD 20.573 billion through 2040, with the unified complex generating USD 7.25 billion in annual revenue. The proposal would lock ANDE's energy cost below USD 30/MWh while allowing Brazil to access supply below USD 50/MWh, anchoring the Southern Cone's energy integration just as Annex C negotiations enter a critical phase.

Cryptocurrency mining farms now represent 15% of Paraguay's total electricity demand, according to electrical engineer and MBA Guillermo Krauch. The 41 active crypto clients consume a total reserved power of 943.8 MW, equivalent to 13.5% of the 7,000 MW from Itaipú legally allocated to Paraguay. Just four firms (Cademot, Zuns, Muiden, W3X) jointly draw 730 MW, exceeding the output of one full Itaipú turbine (700 MW). ANDE president Félix Sosa estimates crypto-mining revenue will reach USD 350 million in 2026, an 18.64% increase over the USD 295 million confirmed in 2025. All current contracts expire on December 31, 2027, after which ANDE plans to recover that capacity for domestic consumption and traditional industry. The debate over the ~944 MW that will free up post-2027 ties directly to Paraguay's pivot toward higher-value-added uses such as data centers and intensive manufacturing.

Paraguay's emerging discussion about nuclear power as a complement to its hydro-dominated energy matrix gained a new chapter this week, with experts cited in La Tribuna concluding that high installation and operating costs make atomic generation difficult to justify in the near term. The current weighted average cost in Paraguay's energy basket sits around USD 30 per megawatt-hour, while nuclear power would reach approximately USD 200 per MWh, largely because the country lacks pre-existing nuclear infrastructure, a regulatory framework, and specialized human capital. Analysts agree that nuclear delivers high-quality, virtually uninterrupted baseload supply, but argue that the economics only begin to make sense over a multi-decade horizon. The debate is unfolding within the framework of the National Energy Policy 2050, which contemplates Small Modular Reactors (SMR) as a long-term diversification option for a matrix currently concentrated in the binational hydroelectric plants of Itaipu and Yacyreta. Specialists emphasize that the realistic short-term path for Paraguay involves accelerating non-hydro renewables, solar photovoltaic, wind, and biomass, alongside distributed generation, while keeping nuclear as a technical evaluation scenario for after 2040, contingent on international partnerships and a meaningful drop in SMR capital costs. The conversation reflects Paraguay's broader effort to reposition itself in regional energy debates while protecting the cost competitiveness of its supply.

Paraguay's utilization rate of the energy produced by the binational hydroelectric plants Itaipu and Yacyreta climbed to 41% in the first quarter of 2026, according to official records reported by ABC Color. The figure marks a gradual improvement over previous years and is matched by a 19% reduction in Paraguay's energy cession to its partners Brazil and Argentina compared with the same period in 2025. The trend reflects two converging dynamics: sustained growth in domestic demand, up 13.1% in the first two months of 2026, driven by residential, commercial, industrial, and cryptocurrency-mining consumption, and an active National Electricity Administration (ANDE) policy of retaining a larger share of the surplus within the national grid. Specialists warn that while the rising local-use indicator is a positive sign of value capture, it also marks the horizon for the depletion of Paraguay's exportable surplus, which could arrive within three or four years. The data reinforces the urgency of two parallel tracks: the renegotiation of Annex C of the Itaipu Treaty, where Paraguay seeks improved compensation terms for energy ceded historically at below-market prices, and the incorporation of new generation sources, particularly non-hydro renewables, plus transmission projects that allow Paraguay to monetize the remaining surplus more effectively in the regional market while it still exists.

Paraguay's National Electricity Administration (ANDE) earmarked more than 15 billion guaraníes (roughly USD 2 million) for specialized equipment to protect the country's electrical network, in a context of mounting pressure on transmission and distribution. ANDE reports a 50% increase in consumption over the past three years and a 17% jump in Q1 2026 alone. The investment will reinforce substation protection, monitoring systems, and critical equipment to prevent failures impacting residential, commercial, and industrial users. The plan dovetails with ANDE's Master Works Plan and active multilateral loans being assessed by the Ministry of Economy. The grid-hardening effort lands as the government leans into Decree 5306, which creates special tariffs for "convergent industries", data centers, AI compute, cloud services, and green hydrogen, making ANDE's reliability a critical pillar of Paraguay's pitch as a regional digital-investment hub.

Paraguay's National Electricity Administration (ANDE) reported 33% progress as of end-March 2026 on field data capture for its national grid digitalization project, an initiative building a high-fidelity digital twin of the distribution system. The project deploys aerial and terrestrial LiDAR sensors, drones, and 360° cameras to map electrical lines with millimetric precision, then processes data with AI and machine learning to generate 3D models and a centralized digital database. The end goal is georeferencing the 2.5 million poles that comprise the distribution network. Field crews have already covered over 80,000 km of line, 561,500 poles, and 104 districts, with strategic Metropolitan Region zones, Asunción, Lambaré, San Lorenzo, Luque, and Mariano Roque Alonso, now complete. ANDE projects significant operational cost reductions, productivity gains, lower technical losses, and a reduction in non-billed energy from out-of-service installations.

The Itaipu Binational Entity transferred USD 107 million to Paraguay between January and March 2026, with funds directed toward priority national development areas. Beyond its role as the country's primary electricity generator, Itaipu plays a key function in financing social and development programs. Meanwhile, the Annex C renegotiation remains stalled with the current tariff of USD 19.28/kW-month continuing under temporary validity, while a new draft agreement sits idle due to Brazil's electoral calendar.

Paraguay finds itself at a crossroads amid the evolving global energy landscape. As one of the world's largest hydroelectric producers, the country generates significant energy surpluses exported to neighboring nations. 2026 is shaping up as a pivotal regulatory year, with authorities finalizing the legal framework for non-hydro renewable energy integration. The Non-Hydro Renewable Energy Promotion Law regulation is in its final stages, which would unlock investment in solar photovoltaic projects and self-generation permits.

Paraguay's binational hydroelectric dam Itaipu supplied 7,767 GWh to the country via ANDE during Q1 2026, out of a total 18,902 GWh generated, enough to cover domestic demand for roughly eight months. March alone saw 6,596 GWh generated. Itaipu contributed 2.48 million MWh, Yacyreta added 533,159 MWh, and Acaray 78,025 MWh. The Puerto Esperanza solar plant in the Chaco also fed 8.5 MWh into the national grid.

ANDE President Félix Sosa unveiled progress on the Centro Brilla urban development initiative, continuing the modernization that began with the first phase. Avenida Presidente Franco is now complete, with work progressing on Calle Benjamín Constant in the historic district.

Electrical energy demand in Paraguay grew 13.1% in the first two months of 2026 compared to the same period in 2025, driven by residential, commercial, and industrial consumption. Puerto Esperanza photovoltaic plant contributed over 8.5 MWh, marking progress in renewable diversification.

Paraguay and Japan are exploring private investment opportunities in the energy and mining sectors. Japanese investors are showing growing interest in Paraguay's hydroelectric potential and natural resources, seeking to channel capital into energy development projects.

Paraguayan energy sector representatives are calling for market-rate pricing on the country's electricity exports, particularly from the Itaipu and Yacyreta binational dams. The push comes as Annex C renegotiations with Brazil advance and global demand for clean energy elevates the strategic value of Paraguay's hydroelectric surplus.

As final stages of Annex C talks approach, experts call for firm negotiation: Paraguay must secure market prices for exported energy or equivalent returns.

Paraguay and Brazil reached a historic agreement on Itaipu tariffs, securing USD 1.25 billion in annual revenue for Paraguay. President Pena called the deal historic as Annex C renegotiations advance. Itaipu already transferred USD 73 million to the Paraguayan state in the first two months of 2026, with foreign ministers announcing substantial progress on revising the 50-year-old pricing mechanism.

President Santiago Peña declared himself the lead negotiator in Paraguay's revision of the Itaipú Treaty Annex C with Brazil.

President Santiago Peña declared himself the lead negotiator in Paraguay's revision of the Itaipú Treaty Annex C with Brazil. The bilateral summit in March 2026 aimed to unblock negotiations on energy pricing, surplus sales to Brazil's free market, and potential expansion of Itaipú's generating capacity with four new turbines.

Mercedes Canese criticizes Paraguay for selling clean hydropower at low prices, subsidizing large consumers without strategic return, especially during Itaipú negotiations.

Former Vice Minister Mercedes Canese criticizes government suggestions that Paraguay could import Brazilian surplus from Itaipú once its own surplus is exhausted.

Researcher Victorio Oxilia suggests seeking a "middle ground" tariff at Itaipú that reduces costs for ANDE while generating additional resources for both countries.

Energy experts warn that Paraguay should prepare for a scenario where it may need to import energy from Brazil through Itaipú, as domestic electricity demand grew 13.1% in early 2026. The warning comes amid a 40.6% drop in binational dam revenues, forcing the Finance Ministry to reallocate fiscal resources.

Engineer Daniel Ríos recommends that Annex C revision include provisions for Paraguay to import energy from Brazil via Itaipú during peak periods.

Foreign ministers of Paraguay and Brazil met and reported "substantial progress" on revising Annex C of the Itaipú Treaty, with further discussions at the Peña-Lula summit.

Paraguay is positioning itself to attract green hydrogen projects, data centers, electric mobility, and ESG-driven companies, leveraging its nearly 100% renewable electricity at USD 41/MWh, the lowest industrial rate in South America. Commerce Minister Riquelme met with executives from OpenAI, Nvidia, Crusoe, and Lambda in Silicon Valley to pitch Paraguay as a global AI data processing reference.

President Peña inaugurated the Paraguay Carbon Forum 2026, positioning the country as a regional hub for climate investment. Paraguay promotes its abundant clean energy and low carbon footprint to attract green industries, hydrogen projects, data centers, and ESG-focused companies.

International attention grows on Paraguay's untapped clean energy surplus from Itaipú as AI/data center investments accelerate.

President Santiago Peña reaffirmed that negotiations on Annex C aim to secure the best outcome for Paraguayans.

Paraguayan President Santiago Peña affirmed he is the "biggest and principal negotiator" in the technical team revising Annex C of the Itaipú Treaty with Brazil.

X8 Cloud announced plans for what could become South America's largest AI data center complex, with investment estimates ranging from USD 10 billion to USD 50 billion over 30 years. Phase 1 construction begins Q2 2026 with a USD 250 million investment for 6 MW capacity and 4,000+ NVIDIA H100 GPUs, expected to create over 2,500 direct construction jobs and 1,500 permanent roles.

HIVE Digital Technologies is expanding its hydroelectric-powered data center in Yguazu, Paraguay, to 400MW capacity. Phase 3 construction began in early 2026 with full commissioning targeted for Q3 2026. The expansion leverages Paraguay's clean energy surplus from Itaipu (14,000 MW) and Yacyreta to power high-performance AI workloads.

Paraguay's national electricity distributor ANDE launched Operativo Alto Paraná 6, a comprehensive action to reduce non-technical electricity losses and regularize supply in Hernandarias, Alto Paraná department. The operation targets illegal connections and payment delinquency near the Itaipú dam zone.

Revenues from Itaipú and Yacyretá fell 40.6% year-on-year in the first two months of 2026, dropping from G. 898 billion to G. 533 billion. The shortfall triggered an austerity policy and forced the Finance Ministry to reallocate resources, while Yacyretá advances its Aña Cuá expansion project.