Paraguay now faces the situation all previous governments encountered annually: defining next year’s tariff without the three-year predictability the 2024 agreement provided. Peña expressed certainty that negotiations will benefit Paraguay regardless of outcome, noting the country benefits either from higher tariffs when selling to Brazil or from lower tariffs that enhance Paraguay’s attractiveness for investment and employment generation. He maintained that Paraguay’s half ownership of Itaipú ensures favorable results under either scenario.
The negotiation extends beyond Annex C, which establishes financial conditions after full debt repayment. Peña identified unmet commitments including navigation locks on the Paraná River, where Paraguay suffered damages from works never executed. The president referenced historical context from defending the Guairá Falls to treaty signature under General Alfredo Stroessner, emphasizing Paraguay’s position nearly reached armed conflict with Brazil before diplomatic resolution.
Brazilian elections scheduled for October 4, coinciding with Paraguayan municipal elections, complicate the timeline as President Luiz Inácio Lula da Silva seeks reelection for a fourth term. Despite electoral dynamics and concluded diplomatic tension from 2025 Brazilian espionage, Peña maintained continuous dialogue exists since his administration began August 15, 2023. He described the relationship as harmonious and respectful despite marked differences across various areas, stressing Paraguay’s approach of building bridges through ongoing conversation. The president positioned the negotiations as complex and comprehensive rather than limited to specific tariff discussions.
This article was curated and published as part of our South American energy market coverage.
