LatinNews Daily - 10 May 2024

*Paraguay’s President Santiago Peña has announced that an agreement has been reached with Brazil on a new tariff for electricity generated by the binational Itaipú hydroelectric complex. The new tariff will stand at US$19.28 per kilowatt-month, up from US$17.66, for the next three years. He added that the process for reviewing ‘Annex C’ – the financial arrangements of the dam’s operations, which establishes that each country owns 50% of the power generated by Itaipú and can sell the balance back to the other at preferential prices – had also begun. “We’ve concluded the first phase of an agreement of vital importance with our Brazilian brothers and the results are a source of great satisfaction,” said Peña, who has been striving to obtain better terms for Paraguay, which sells surplus energy produced at Itaipú to Brazil at low prices. According to Paraguay’s foreign ministry, the new tariff will generate around US$1.25bn annually – US$280m in royalty income, US$650m in social investment, US$265m in energy compensation, and US$53m in capital gains. Paraguay’s Foreign Minister Rubén Ramírez Lezcano explained that, in addition to the new electricity tariff, Paraguay and Brazil had also agreed to maintain Itaipú’s operating agreement, to allow Paraguay to sell its surplus energy to the Brazilian free market, and to conclude the renegotiation of Annex C by the end of the year. The agreement comes following negotiations in Asunción with a Brazilian delegation led by the minister for mining & energy, Alexandre Silveira.