Itaipu: negotiations are stalled

Itaipu: negotiations are stalled

Manuel María Cáceres, Paraguayan general director of Itaipú Binacional, and Félix Sosa, head of ANDE, gave a press conference where they gave details on how the negotiations on the Itaipú 2022 tariff are progressing.

Both senior officials announced that the negotiations are stalled because Brazil wants to reduce the rate to US$18.95 per kW/month while Paraguay wants to keep it at US$22.6. This is due to the fact that our country wants to carry out infrastructure improvements in ANDE for US$203 million, in order to be able to use 50% of the energy generated by Itaipu.

Manuel María Cáceres, general director of Itaipú, informed that there is still no definition about the 2022 rate. “Itaipú will continue to fulfill its transfer commitments to the Paraguayan State. We are making an effort to close this negotiation as soon as possible”, he expressed.
He stated that they negotiate almost daily, however, they still do not have a solution.

“We all would have liked to already have a budget base and a rate, but there are conflicting positions that is why the negotiation does not end. We know the importance of the issue, what is at stake. The binational Itaipu, despite not having a rate for this year, is in compliance with international commitments such as royalties”, he commented.

For his part, the head of ANDE, Félix Sosa, pointed out that they are currently working to define the rate.

“We are looking for common interests, confident that we will reach an agreement for the benefit of both countries,” he said.

Sosa highlighted that one of the alternatives to maintain or be close to the rate of US$22.60 is the approval of a US$203 million investment in the Paraguayan electricity sector.

It should be remembered that Itaipu Binational announced at the beginning of the year a cooperation for ANDE for US$ 203 million. The money will be used mainly to strengthen the transmission and distribution networks, to be executed within five years.

This investment depends on the rate. In other words, one of the conditions to receive this cooperation is to maintain the rate price at US$22.60.

“We found common interests. Now the proposal to define this year the power contracted for next year is being discussed. We agree, but if we should define the rate for next year in parallel. We cannot define how much we are going to buy a merchandise if we do not know how much it will cost. So the hiring of power and the rate for next year is on the table, ”he explained.

Our country agreed to define the powers to be contracted, as long as the rates for this and next year are defined.

“This is the first time we have had a reduction in debt commitments. Historically, an agreement has been reached between the countries. We are sure that we will reach an agreement”, he sentenced.

Cecilia Vuyk, an energy expert, does not believe the claims of the national authorities. She maintains that it is impossible for the Government to “be surprised” by the obvious.

“This only shows that they continue to sell smoke and negotiate below,” he questioned.

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