Government celebrates historic agreement with Brazil generating an annual income of US$ 1.250 billion

Asunción, Agencia IP.- Paraguay and Brazil have reached a historic agreement on the Itaipu Binational energy tariff. The President of the Republic, Santiago Peña, highlighted that it represents a «triumph for Brazil and Paraguay,» translating into significant resources that will be allocated to ensure «the well-being that all Paraguayans deserve.»

The President officially announced this Thursday through his social media channels in a message addressed to the Paraguayan population.

«We have concluded the first phase of a vitally important agreement with our Brazilian brothers, and the results are reasons for enormous satisfaction. This negotiation represents a triumph for Paraguay and Brazil,» Peña expressed at the beginning of his message.

The agreement between the two countries operating the binational hydroelectric plant was set at a tariff of USD 19.28 until 2026. This agreement will generate around USD 280 million in royalty income, USD 650 million for social investment per year, USD 265 million for energy compensation, and USD 53 million in capital profits and other income, for a total of USD 1.250 billion per year.

He emphasized that this is a historic agreement that not only benefits both nations but also generates significant additional income that will allow long-delayed investments to be made.

«We have also managed to maintain the current operational agreement, allowing us to make important investments in our electrical system to harness our energy further. But, in addition, with this agreement, a historical claim for Paraguay has been achieved by allowing the direct sale of Paraguayan energy to the Brazilian market, thus achieving the long-awaited energy sovereignty after more than half a century,» he stated.

In the same vein, he said that with this agreement, the process of reviewing Annex C begins, the definition of which will be fundamental for Paraguay’s development in the coming decades. «We will do it with the same spirit of patriotism that has allowed us this great achievement,» he added.

The President spoke of a turning point in the country’s development. The future is full of opportunities and possibilities, considering that the income generated in this negotiation will be invested in fundamental areas for Paraguay’s growth and development.

Where will the resources be allocated?

In that context, he explained the destination of the money obtained through the agreement. «First, we will invest in our children. We will invest in caring for our most precious asset, which is them, creating health, nutrition, and education promotion centers for all the children of Paraguay,» he cited.

Likewise, the Executive will reinforce national and citizen security. For this purpose, an unprecedented and robust investment will be made in security to generate tranquility and the well-being that all Paraguayans deserve.

The Head of State also announced the construction of three large hospitals in the interior of the country, which will be added to the four currently under construction, for a total of seven fully equipped large hospitals that will provide quality care to Paraguayan families.

Another point to be addressed is the modernization of the country’s internal road infrastructure, which will eliminate the isolation of entire communities with all-weather roads.

«We will invest in public transportation, thus settling one of our country’s historical debts for the good of thousands of Paraguayans. And sixth, we will strongly bet on our energy infrastructure to achieve the long-awaited energy sovereignty through energy consumption by industrializing the country,» he stated.

Doors for negotiating a new Annex C

On the other hand, Peña indicated that all these groundbreaking achievements undoubtedly leave something very important open and to be defined: the future of Itaipu itself. Indeed, the negotiation of a new Annex C remains to be resolved.

In this regard, he announced that they agreed with the Brazilian authorities to negotiate and finalize a document by the end of 2024.

He stressed that the opportunity to negotiate a new Annex C represents a moment of great significance for our country. Just as the Foz de Iguazú Act avoided a conflict, even a war, and laid the foundations for using the first 50 years of the dam, this document will mark Itaipu’s future.

«Here, we will need the vision and effort of all Paraguayans, and as President, I will be the first to be open to listen and define in consensus the best path to follow. We must decide primarily whether we will continue to be an exporter of energy or if Paraguay will finally use all its energy, thus achieving our country’s long-awaited industrialization and modernization,» he argued.

The Head of State reiterated the commitment to work so that national and foreign industries have an unbeatable horizon in Paraguay, thus achieving energy sovereignty.

He addressed Paraguayan and foreign investors, stating that Paraguay is prepared to take the big leap. We will use our green and renewable energy, produced by Itaipu at a low cost, to industrialize our country, generating thousands of jobs for Paraguayans and making our country the place it deserves.

«Dear compatriots, let us celebrate today this agreement that opens the doors to a better future for all Paraguayans, but let us immediately, right now, start working on that new vision of Itaipu for the future, as a generator of energy, but above all of economic and social development for our country. I believe from the depths of my heart in Paraguay. I firmly believe in its past glory. I believe, above all, firmly in its destiny of greatness. Working together, among all, we can make it come true. Long live Paraguay!» he concluded.