Energy purchases account for US$956 million, representing 40.9% of the total budget. Itaipú binational hydroelectric plant will receive 95% of that allocation at US$908 million, while Yacyretá accounts for the remaining US$48 million. This component shows a 10% reduction compared to the budget in force through July 2026, calculated at G.6.17 trillion in local currency terms.
Physical infrastructure investment totals US$614 million, constituting 26.2% of the budget and marking a 22% decrease from the current allocation. Construction projects will absorb US$439.3 million or 71.5% of the infrastructure program, with another US$163.8 million designated for machinery, equipment and tools. Additional allocations include US$8.4 million for office and computing equipment, US$2.1 million for intangible assets, and US$0.1 million for investment studies.
ANDE will finance 50.9% of infrastructure investments with own resources at US$313 million. External financing comes from the Inter-American Development Bank providing US$131 million, CAF contributing US$69 million, and Germany’s KfW Bank supplying US$60 million. Additional funding includes US$19 million from the European Investment Bank, US$15 million from Fonplata, US$4 million from Japan’s JICA, and US$2 million from Taiwan.
The Phase II high-voltage transmission expansion carries a total cost of US$326.3 million with US$70 million allocated for 2027. A centerpiece project, the second circuit of the 500kV Margen Derecha-Villa Hayes transmission line, has a complete cost of US$155 million and receives US$38 million in 2027. Báez stated this infrastructure closes the loop needed to transmit Paraguay’s full Itaipú entitlement. The Chaco Central system reinforcement will receive US$76.5 million for 220kV lines connecting Villa Hayes, Villa Real, Pozo Colorado and Loma Plata, plus construction of the Pozo Colorado substation.
The budget justification cited electricity consumption growth of 12.5% in 2025 compared to the previous year, driving infrastructure expansion requirements. The allocation structure shows 86% financed through institutional resources at US$2.001 billion, with 14% from external sources at US$339 million.
This article was curated and published as part of our South American energy market coverage.
