Paraguay’s ANDE Sets September 30 Deadline for Atome to Post $40 Million Guarantee or Face Contract Cancellation

ANDE president Miguel Báez told the bicameral budget commission on September 21 that Atome must deposit a bank guarantee equivalent to 2 percent of its annual reserved energy cost—approximately $40 million for 12 months of 145 MW capacity—if it fails to reach a new agreement before September 30. The guarantee requirement stems from Atome’s repeated postponements of its operations start date. Under the original May 2022 contract, the company was to begin operations January 1, 2025, reserving 60 MW under Tariff Schedule 21. Three successive amendments doubled capacity to 120 MW in late 2022, raised it to 145 MW with a June 2025 start in July 2023, and pushed the date to January 2027 in September 2024. Báez stated that Atome submitted a fourth modification request in August 2026 seeking to delay operations until 2029, despite the contract expiring in 2032. He dismissed the proposal, noting that in Villeta “Atome has nothing built. It has a sign that says Atome Paraguay.”

The commercial core of the dispute centers on tariff structure. Atome is seeking to exit Tariff Schedule 21, where currency conversion currently places rates around $36 per MWh, in favor of a 15-year power purchase agreement at $30 per MWh fixed for the first decade with only 2.5 percent annual increases in years 11 through 15. Báez characterized the conflict as commercial rather than legal, stating bluntly that “we cannot sell below our tariff.” The ANDE president emphasized that the utility contracts energy in advance for Atome’s reserved Itaipu capacity, incurring costs the state absorbs even when the company does not operate.

Legislative scrutiny intensified during the budget hearing. Senator Esperanza Martínez questioned whether the proposed tariff constitutes selling energy “almost at cost or below cost” and demanded an accounting of Atome’s investments during four years of contract validity. Deputy Raúl Benítez asked whether any ANDE or Energy Ministry documents could “compromise the government” with the company or if Atome’s claim represents “a pressure strategy to achieve a deal.” Deputy Alexandra Zena emphasized that “the true owner of ANDE is the Paraguayan” and demanded the utility “take the bull by the horns” in negotiations.

Atome’s legal adviser Jorge Gross Brown told local media the company seeks “contractual stability and shielding” against future regulatory changes rather than preferential tariffs. He noted that industrial tariffs at 220 kV and 66 kV currently hover around $35 per MWh and that the contract’s reference to “Tariff Schedule 21 or any that may replace it in the future” creates investment uncertainty. Brown confirmed that Atome issued a notice of dispute around September 15, 2026, giving the government three months until December 17 to resolve the matter before the company proceeds to the International Centre for Settlement of Investment Disputes in Washington under the UK-Paraguay bilateral investment treaty. The project carries backing from IDB Invest, International Finance Corporation, Germany’s DEG, and the European Investment Bank. Industry and Commerce Minister Marco Riquelme supports the initiative, projecting 4,000 construction jobs and over 1,000 permanent positions, but ANDE unions issued an open letter calling the arbitration threat baseless and warning against yielding to pressure for unjustified tariff privileges.