For Paraguay, Itaipu’s energy is a commodity that pumps huge amounts of dollars. Since the binational began commercial operations, the country has received, between royalties and compensation, US$10.2 billion between 1989 and 2020, at a rate of US$300 million per year.
All that money has been disseminated in budget allocations where current expenses, mainly wages, compromise more than 75% of the PGN. It can be said that in this scheme, Itaipu has been an efficient plugger of budgetary gaps under the guise of social programs, environmental impact mitigation, etc.
For Brazil, on the other hand, Itaipu’s energy is an essential input to maintain the growth rate that started in the middle of the 20th century. Itaipu contributes 30% of generation among the top 10 Brazilian hydroelectric plants (third place) and 16% of the country’s total energy production. In order to open a new stage in the administration of these resources, the Brazilian Government has formed the Brazilian Company of Participations in Nuclear Energy and Binacional SA (ENBPar), a joint-stock company controlled by the Ministry of Mines and Energy whose mission is to face the denationalization of Eletrobras, which until the beginning of 2022 was in charge of the transmission and commercialization of Itaipu’s energy. ENBPar was created with the objective of taking over the activities of Eletrobras that could not be privatized, including Itaipu Binacional. Its objective is to adapt Itaipu’s energy offer to the complexities of a highly diversified Brazilian market. “An electrical system dominated by sources that provide energy regardless of production costs is not suitable for a market design based on the competitive sale of electricity in the short term,” warns a study by the Institute of Economics of the Federal University of Rio de Janeiro. janeiro. This indicates that for Itaipu’s offer to be acceptable, it must be the product of a reasonable cost, clear of any charges that distort it.
Finally, what are we looking for in Paraguay if not cheap, efficient and sustainable energy to stimulate development, raise the quality of life and attract productive investment. The era of the cash cow for luxury counseling and unheard-of financing is being left behind.
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The entrance the end of an era was first published on The Independent.
