Paraguay to stop “giving away” free energy to it’s neighbors

In an interesting and aggressive twist new Paraguayan President Federico Franco has informed neighboring Argentina and Brasil that Paraguay will no longer be “giving away”  energy generated from its Itaipu y Yacyreta hydroelectric generators. President Franco instead insists that Paraguay needs the energy for more domestic use.

President Franco mentions, “When are Brazil and Argentina going to respect us?” during a speech on energy policy at the defense ministry. “I refuse to accept that Paraguay has to give its energy away as a gift” referring to the Itaipu Dam (the world’s largest hydroelectric plant generating 14,000 MW[Megawatts]) which alone provided 20% of the energy supply in Brazil and 94% in Paraguay.

These statements are significant because it would fundamentally change the Acordo Tripartite signed by Argentina, Brazil and Paraguay October 9, 1979 which regulates river levels and the allowed changes in those levels as a result of construction and operation of the project which effects the watershed upstream that is shared by all three countries. Brazil and Paraguay jointly operate the Itaipu Hydroelectric dam on their shared border, where Paraguay and Argentina have a similar pact for the Yacyreta power station part of the project.

Further complicating matters is that both Argentina and Brazil and pulled their ambassadors out of Asuncion and do not recognize the government of Franco after the recent coup. With Mercosur suspending Paraguay from its participation until new elections are held the country appears at a crossroads and must tread lightly on such matters with their closest geographic neighbors. Brazil has taken to a slow cautionary reaction to the situation thus far.


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