Paraguay’s director of Itaipu, Justo Zacarías Irún, told local media that his government has not received any formal proposal from Brazil regarding the $15 tariff level reported by Brazilian news outlets. He emphasized that Paraguay is seeking a medium-term tariff framework spanning three to five years, similar to the 2024-2026 arrangement, which provided financial stability and predictability for infrastructure projects and social programs funded by the plant’s revenues.
The Paraguayan position calls for maintaining relatively elevated tariffs to continue channeling resources toward national development initiatives. Zacarías Irún warned that a reduction to $15 per kW/month, or lower estimates of $10 to $12 circulating in some analyses, would severely impact Paraguay’s ability to fund these programs. The director stated that negotiations will resume after Brazil’s general elections and Paraguay’s municipal elections, with formal discussions expected to intensify in November and reach conclusions within three to four weeks.
The tariff discussions occur under Annex C of the Itaipu Treaty, which establishes that each country holds rights to 50 percent of the plant’s generation, with surplus energy from one partner sold to the other at preferential rates. Paraguay has leveraged the current tariff structure to secure additional income that supports social programs including its Hambre Cero initiative.
Meanwhile, the Brazilian electricity system is incorporating Itaipu into contingency planning for El Niño impacts expected over the coming months. The National Electric System Operator confirmed that Itaipu’s reservoir will be part of a strategy to maintain stable power supply in the National Interconnected System during periods of higher demand and adverse hydroenergy conditions. The CMSE monitoring committee outlined plans to deploy the Operational Power Reserve in September, November and December 2026, combining Itaipu with complementary thermal generation and optimized operation of São Francisco River hydroelectric facilities. The committee left open the continuation of this strategy into early 2027, noting that January and February plans depend heavily on hydroenergy conditions and the effective start of the rainy season in key basins.
This article was curated and published as part of our South American energy market coverage.
