The President of Paraguay, Santiago Peña, stated that the country does not intend to accept a reduction in the Itaipu energy tariff after 2026, even in light of the agreement signed with Brazil in May 2024.
The statement reignites diplomatic and regulatory tensions surrounding the binational hydroelectric plant, especially at a time when discussions are underway regarding the revision of Annex C of the Itaipu Treaty, which defines the plant's financial basis.
In a press conference with the Paraguayan media, Peña defended maintaining a higher tariff, citing the existence of "historical debts" and the need to secure resources for investments in areas such as infrastructure, health, education, and socio-environmental programs.
According to him, a reduction in prices would compromise the binational company's financial capacity.
This position contradicts the bilateral agreement signed in 2024, which establishes that, starting in 2027, the Itaipu tariff should reflect only the strict operating cost, as foreseen in Annex C of the Treaty, without the inclusion of discretionary costs.
"The answer is no. There are many debts owed to Paraguay and to the Paraguayan people, and part of those debts is being paid off with investments in essential areas," Peña stated.
Impact on consumers
Currently, the Itaipu tariff is frozen at US$19,28 per kW for the years 2024, 2025, and 2026. To reduce the impact of this value on energy bills, the Brazilian side of the plant has committed to making a contribution of US$285 million in 2026, which allows maintaining the effective tariff for consumers in the South, Southeast, and Midwest regions at US$17,66 per kW/month.
Itaipu also allocates approximately US$1,51 billion per year (R$8,14 billion) to socio-environmental costs. Since Paraguay does not consume all the energy it is entitled to under the Treaty, Brazilian consumers end up bearing almost 80% of the plant's total costs.
In practice, this means that for every R$1 invested in social programs using Itaipu resources, the Brazilian consumer in the regulated market pays approximately an additional R$1,60 in electricity bills.
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