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By Sergio Pintado
Paraguay seeks to renegotiate the clause that obliges it to promote the power it doesn’t eat from the Itaipu dam at decrease market costs to Brazil.
In a dialogue with Sputnik, Senate candidate Ricardo Canese stated that permitting Asunción to promote power from Itaipu to different international locations would profit the area and the atmosphere.
On April 26, 1973, the then-presidents of Paraguay and Brazil, Alfredo Stroessner (1954-1989) and Emilio Garrastazu Médici (1969-1974) signed the Itaipu Treaty with which each international locations not solely sought to resolve a historic border battle but in addition agreed to construct a hydroelectric dam on the Paraná River.
Half a century after it was signed, and with the debt for its development lately paid off, Paraguay is making ready to re-discuss elements of the settlement, traditionally thought of extra helpful to Brazil and detrimental to Paraguayan financial pursuits.
The settlement interpretation that has prevailed because it was signed obliges Paraguay to promote the electrical energy it doesn’t use to Brazil, typically at decrease market costs.
“It is an ambiguous text used by the Brazilian dictatorship, with the complicity of Stroessner and the successive governments of the Colorado Party oligarchy, to interpret that Paraguay had to deliver the energy it consumed to Brazil at a derisory, ridiculous, even free price”, commented to Sputnik the engineer Ricardo Canese.
He is a Paraguayan Mercosur parliamentarian and Parlasur Special Commission on Hydroelectric Plants president.
Canese, presently a senatorial candidate in his nation, stated that having settled the debt for the development of the dam places Paraguay “at a historic moment” regarding Itaipu since, on August 13, 2023, the consequences of Annex C of the Itaipu Treaty, which incorporates the financial preparations for the negotiation of power, expire.
The date permits the phrases to be renegotiated, which is seen as a chance for a extra favorable deal for Paraguayans.
For Canese, Paraguay’s destiny on this course of will rely on the nation having “representatives who defend national interests and have the social sensitivity for the country to obtain fair conditions and prices”.
One of the pillars of this renegotiation must be, he remarked, that Paraguay ought to be capable to promote Itaipu’s power at market costs and never at decrease ones, as is presently the case.
Brazil paid Paraguay US$20.75 per kilowatt per 30 days for the power and lowered this fee to US$ 2.67 per 30 days on a provisional foundation.
Canese recalled that an settlement signed in 2009 between then-presidents Fernando Lugo (2008-2012) and Luiz Inácio Lula da Silva (2003-2011) empowered the Paraguayan National Electricity Administration (ANDE) to cost Brazil the market worth.
However, he identified, the governments that adopted Lugo’s – impeached after an impeachment trial in 2012 – “have not even attempted to exercise this sovereignty”.
THE KEY TO THE REGION AND THE ENVIRONMENT
Paraguay’s different declare is to have the ability to commerce the electrical energy it doesn’t eat amongst third international locations with out being obliged to ship it to its Brazilian counterpart, as is presently the case.
For the aspiring senator, permitting this may profit Paraguay and the area since Brazil and Argentina may benefit from the power produced by Paraguay’s binational dams, Itaipu with Brazil and Yaciretá with Argentina, with an analogous settlement.
“Sometimes the one who needs more energy is Brazil, as happened in 2021 when it had a water deficit, it paid better prices, and it was absurd that it could not use the energy from Yaciretá that Paraguay did not consume.”
“In 2022, the opposite happened; Argentina had the best prices and could not buy energy from Itaipu”, he identified.
Canese recalled that when a rustic “pays better prices” than the power market, it generates power from thermal energy vegetation, that are dearer and extra dangerous to the atmosphere, as hydrocarbons feed them.
“It is in the region’s interest to burn fewer hydrocarbons, to emit fewer greenhouse gases, and to share the benefits. It is absurd to continue with this system,” he summarized.
For the candidate for the Senate within the subsequent elections on April 30, what’s missing within the area to implement a real power interconnection is “political will”.
In addition to questioning the Paraguayan Colorado Party, Canese identified that the obstacles in Argentina and Brazil come from the non-public firms in control of electrical energy distribution in each international locations.
“The private companies do not want Paraguayan energy from Itaipu to enter because they will stop billing, and the market price will decrease.”
“The powerful interests of the private sector are those that oppose an energy integration process that is in the interest of the whole region”, he identified.
In any case, Canese was assured that, with Lula again in authorities, Brazil would adjust to what he signed in 2009.
He additionally estimated {that a} victory of the Concertación Nacional – operating Efraín Alegre for the presidency – might give Paraguay a firmer place with Brazil.
The aspiring senator thought of that Paraguay “should contract 100%” of its share of the power generated – that’s, 50% of all that’s generated – after which “dispose of it as a sovereign country”, bidding it within the power market or providing it by means of agreements to international locations within the area.
“We are not an Argentine province or a Brazilian state”, Canese emphasised, in regards to the firmness with which Paraguay should benefit from the advantages of the power generated by its dams.
GOOD FOR PARAGUAY, BAD FOR BRAZIL?
What seems as a golden alternative for Paraguay is seen as a diplomatic problem for Brazil, which doesn’t discover it handy to lose the Paraguayan facet of Itaipu as a safe power provider at low costs.
“I am sure that we will make a treaty that takes into account the reality of both countries and that takes into account the respect that Brazil must have for its ally, our beloved Paraguay,” President Lula remarked in mid-March throughout his assembly along with his Paraguayan counterpart, Mario Abdo Benítez, throughout the ceremony of the inauguration of Enio Verri as the brand new Brazilian director of the dam.
The Brazilian president emphasised Brazil’s willingness for the brand new settlement between the 2 international locations to profit each international locations and his confidence that “it will be very beneficial for the maintenance of the development of Paraguay, of Brazil and for this cordial relationship between the Brazilian and Paraguayan people”.
However, some Brazilian consultants take into account that Paraguay ought to prioritize Brazil as a consumer over probably negotiating its electrical energy within the regional market.
Speaking to Sputnik Brazil, Regiane Nitsch Bressan, an knowledgeable in International Relations on the Federal University of Sao Paulo (Unifesp), stated that though Paraguay is not obliged to promote to Brazil, “due to logistics and diplomatic commitment, these sales tend to continue”.
For Bressan, the Itaipu dam “would not exist” if it weren’t for Brazilian financing, and the Brazilian Foreign Ministry nonetheless has “great diplomatic power” over Asunción.
With data from Sputnik
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