Iguazú AI City and Paraguay's surplus from Itaipu

Until now, Paraguay has consumed only part of its 50% of Itaipu and ceded the surplus to Brazil. Carlos Alberto Tavares Ferreira reads in Iguazú AI City, by Crusoe with Paraguay's Araico, with projected investments of up to USD 12 billion, a sign that this surplus may shrink. Without a blackout or an automatic tariff rise, he says, but with planning.

The calendar lends weight to the thesis. The 2024 tariff of USD 19.28/kW-month is valid until the end of 2026, and the revision of Annex C, scheduled for December 2024, remains without agreement, according to CNN Brasil of 1 September. According to Agência Brasil of 14 April, one option under negotiation is to sell the Paraguayan quota on the Brazilian free market, with the approval of both parliaments.

Each dollar per kW in the tariff weighs around USD 150 million per year on the consumer's bill, according to CNN. For generators and traders, Paraguayan energy in the free market would change the supply for long-term contracts.

Four decisions are open at the same time: the 2027 tariff, Annex C, the sale of the surplus and legislative approval. The end of December is the first milestone to watch.