Paraguay defends an adequate level of electricity tariff to ensure its development, says Minister

Asuncion, Agencia IP.- The Minister of Industry and Commerce (MIC), Javier Giménez, revealed that Paraguay proposes to maintain the amount of the Itaipu energy tariff for this year at an appropriate level to guarantee the quality of life of its people and, at the same time, create the largest fund in history for infrastructure projects «that will change the face of the country.»

Giménez spoke on Wednesday with Radio Nacional del Paraguay about the meeting held by the Paraguayan delegation this Monday, led by the Head of State, Santiago Peña, with the President of Brazil, Luiz Inácio Lula Da Silva, mainly focused on the Itaipu 2024 tariff and the review of Annex C of the hydroelectric treaty.

The minister explained that the government’s vision focuses on maintaining the tariff so that economic resources can be invested in more infrastructure for the country.

«Paraguay proposes to maintain the tariff at an appropriate level that allows people to pay their electricity bills, allows industries to pay their electricity bills, but at the same time, enables the creation of the largest fund in history to carry out infrastructure works that will change the face of the country,» he reinforced.

He clarified that the neighboring country shares this proposal but maintains that it could be slightly lowered. «The negotiations they are having with Paraguay also take it internally. President Lula committed to coming to Paraguay to define the tariff to plan the two countries’ development,» he said.

He explained that the tariff proposed by Paraguay seeks to generate resources above USD 2 billion, which would be distributed equally. «President Lula committed to resolving the issue, and we hope it will be convenient for our interests,» he emphasized.

Two complex issues framed in the negotiation

At another moment, the Minister of MIC assured that there were significant advances and highlighted that the issues are complex; therefore, they are being analyzed delicately «as it will define the country’s future.» He also commented that an important step was taken with this meeting.

He continued, «On the one hand, we have the tariff definition for this year. Brazil wants one number, and Paraguay wants another; conversely, there is a much more complex negotiation encompassing the issue of Annex C, so the two negotiations are taking place simultaneously.»

In the same context, he admitted that although the meeting lasted almost five hours, they could not delve into Annex C but focused on the current year’s energy tariff.

The high-ranking state official expressed confidence that both nations would reach an agreement that would benefit both peoples. «Negotiations also have their maturation time. There is a reasonable difference that we hope to shorten, and in any negotiation, one has to give to receive; however, Paraguay’s argument for why it wants that tariff is much more solid,» he detailed.

In that context, he emphasized that Paraguay’s position has historical and economic precedents and future projections, which he considered fully justified in what is being requested.

«The issue of Itaipu is more important for Paraguay than for Brazil, considering that Brazil’s economy is larger than Paraguay’s, so in percentage terms, the tariff and what it generates are more significant for Paraguay than for Brazil,» he stated.

On that point, he argued that a very high tariff could reduce competitiveness for hydroelectricity compared to alternative energies. Therefore, the idea is to bring the tariff to the threshold of competitiveness for industry and for what Brazilian consumers can pay and generate resources for the binational.

«The first step we have to take is with the definition of the tariff for this year (…) we must find the exact point where it does not affect the pocket of industries and the population but generates those resources that we need,» he declared.