The announcement by a Brazilian minister that the government has reached an “historic” agreement with Paraguay over the price of energy produced by the Itaipú binational power plant has drawn mixed reactions from Brazil’s private sector and was played down by officials in Asunción.
Brazilian mines and energy minister Alexandre Silveira said in a statement on Tuesday that an agreement had been reached after years of negotiations regarding energy price adjustments. His office issued the communiqué following a meeting with Paraguayan President Santiago Penã.
Silveira said that the two sides agreed to increase the price of energy sold by Paraguay to Brazil by 15.4% to $19.28 ($3.8) per kW from the current $16.71/kW for the next three years. Brazil will no longer pay Paraguay additional costs related to the plant from 2026, he said.
However, Paraguayan officials subsequently called for caution on the matter, saying during a press conference there are still a few points to iron out, according to the 5 Dias newspaper.
In Brazil, meanwhile, consumer associations criticized the agreement, and said the price the country pays should in fact fall as it has paid off its Itaipú-related debt.
The association of Brazilian energy traders welcomed the fact that the electricity from Itaipú not consumed in Paraguay will be able to be sold on the deregulated free market, which may reduce distributors’ costs.