In Brasilia, Lula and Paraguay’s Peña discuss the future of Itaipu

Brazil’s President Luiz Inácio Lula da Silva received the President of Paraguay Santiago Peña for a meeting at the Itamaraty Palace this Monday, January 15. The leaders discussed tariffs for energy sold by the Itaipu binational hydroelectric plant; work on a bridge between the two countries; and current Latin American issues.

This is an excellent year for both Paraguay and Brazil, because we have finally finished paying off the debt we owed to build Itaipu, made 50 years ago. And now we are able to use the resources coming from Itaipu to improve the quality of life of the people of Paraguay, the people of Brazil and, at the same time, to try to establish possibilities for new investments with the money raised by selling energy”

Brazil's President, Luiz Inácio Lula da Silva

“This is an excellent year for both Paraguay and Brazil, because we have finally finished paying off the debt we owed to build Itaipu, made 50 years ago. And now we are able to use the resources coming from Itaipu to improve the quality of life of the people of Paraguay, the people of Brazil and, at the same time, to try to establish possibilities for new investments with the money raised by selling energy,” said President Lula during a statement to the press at the end of the meeting.

» Full text of President Lula's speech

» High-resolution photos (Flickr)

50 years after the agreement that allowed for the construction of Itaipu—from which each country has the right to 50% of the generated energy—Brazil and Paraguay are discussing the revision of Annex C of the Itaipu Treaty, which provides for the financial terms and provision of electricity services by the company.

Lula highlighted his desire that the review, foreseen by the agreement that was made in 1973, to be completed as quickly as possible. He also stated that he will discuss the issue of the price of electricity produced by Itaipu with Peña once again. The next meeting is to take place in Asunción, Paraguay. “We have differences concerning tariffs, but we are willing to find a solution together,” stated the Brazilian President.

Peña pointed out that working with Brazil is a priority to the Paraguayan government. “We have to look to the future, and I am very ambitious about what we can achieve. Today's meeting was very important. We conveyed Paraguay's vision, we listened to Brazil's position, which has a lot to contribute to this process,” said the Paraguayan leader.

The Itaipu hydroelectric plant in Foz do Iguaçu (in the Brazilian state of Paraná) produced 83.8 million MWh in 2023—20% more than in 2022 (69.8 million MWh), and the best number of the last five years. During the period, it was responsible for approximately 88% of Paraguay’s electricity trade, and for 10% of Brazil’s.

INTEGRATION — Lula and Peña also discussed the construction of the integration bridge between Brazil and Paraguay, to facilitate the transport of cargo and passengers and to strengthen commercial relations. In December, Brazil’s National Department of Transport Infrastructure (Departamento Nacional de Infraestrutura de Transportes/DNIT) signed the service order that allows work on access to the bioceanic bridge on BR-267/MS to begin. The bridge will connect Brazil and Paraguay from Porto Murtinho (state of Mato Grosso do Sul, Brazil), and Carmelo Peralta, in the neighboring country.

“I invited my comrade Santiago Peña for a joint visit to Porto Murtinho so that we can visit the integration bridge,” said Lula.

REGIONAL INTEGRATION - The two leaders also discussed relevant Latin American issues—especially the elections in Guatemala, and the outburst of violence in Ecuador. Both expressed their intention to continue to work together towards regional integration. Presently, Paraguay occupies the temporary Presidency of Mercosur, and Brazil presides over the G20.

“I think we will be able to finish our mandates having built the best relationship that Brazil has ever had with Paraguay and that Paraguay has ever had with Brazil. A relationship of respect, a relationship in which Paraguay has the same opportunity to grow as any other country. And Brazil, it is not about being generous, Brazil has the obligation to contribute so that Paraguay may use the full potential of the energy produced in Itaipu for its growth,” highlighted Lula.

PARTNERSHIP — Paraguay is home to the third largest Brazilian community abroad, harboring an estimated 254 thousand plus Brazilians. Brazil is Paraguay's main trading partner. In 2023, bilateral trade added up to USD 6.6 billion.

PREVIOUS VISITS — Last August, the Brazilian leader attended President Peña's inauguration ceremony in Asunción. Peña visited Brasília twice last year, on May 16 and July 28, and met with Lula to discuss common agendas. He was also in Rio de Janeiro in December for the Mercosur Heads of State Summit. On that occasion, the Federal Government announced the “Routes for Integration” initiative, which will receive around BRL 50 billion from development banks to create a network of South American integration and development routes.