February 25, 2021

Paraguay appoints a commission to study the energy treaty with Brazil of 2023

Paraguay announced on Friday the first members of the commission that will lead the renegotiation with Brazil of the Itaipu dam treaty in 2023, a day after the Executive raffled off its biggest political crisis due to an energy agreement signed with the neighboring country.

The creation of the commission that will study how Paraguay should manage the surplus of power from the hydroelectric power station was one of the commitments acquired on Thursday by the Paraguayan president, Mario Abdo Benítez, after criticism of the negotiations with Brazil on energy.

The two countries will have to reach an agreement to modify Annex C of the Itaipu Treaty, which expires in 2023 and forces Paraguay to sell to Brazil at cost price the surplus of 50% of the energy generated by the dam, located on the border between both states.

The new Foreign Minister of Paraguay, Antonio Rivas, informed the media on Friday of the appointment of the first twelve members of the commission, including politicians, economic advisors and energy specialists.

The presence of two former finance ministers stands out: César Barreto, who was in charge of the portfolio between 2007 and 2008 during the Government of Nicanor Duarte, and Manuel Ferreira, who led the ministry between 2012 and 2013 as part of the interim Executive of Federico Franco .

Jorge Ayala and Efraín Enriquez, who led the Paraguayan side of Itaipú and Héctor Richer, who was the president of Paraguay's state power company between 1997 and 1998, are also part of the commission.

With a more political profile, ex-trainers of the Colorado Party, Hugo Estigarribia, and the National Encounter, Mario Paz, appear on the list.

The architect Soledad Núñez, the economic analysts Fernando Masi and Alberto acosta, as well as the specialists in energy matters Gerardo Blanco and Guillermo López complete the commission of advisers of the Paraguayan Government.

Rivas explained that this preliminary list can be increased to reach a figure close to 20 participants, since some of the experts identified by the Executive have not yet answered their invitation.

This group will join the advice given by the American economist Jeffrey Sachs since 2012, who advocates studying the regional market for energy consumption and demand, in order to prepare the agreement.

In that sense, the expert predicts that in the future a regional strategic policy will be created between the Mercosur countries, as a result of an interconnection of their energy systems.

In addition to announcing the creation of the commission, Rivas also informed that the Government will carry out changes in the Itaipu council, following the controversial energy agreement, although it did not want to anticipate which people it will affect.

The controversy began last Wednesday, after the filtration of a bilateral act signed in May that established a schedule of the annual power contracted by Paraguay that went from 1,370 megawatts (MW) in 2019 to 1,924 MW in 2022.

The disclosure of the document, which for the opposition parties had a negative impact on the country, led to the resignation of five senior government officials, including Foreign Minister Luis Alberto Castiglioni.

The director of the Paraguayan side of the Itaipu hydroelectric plant, José Alberto Alderete, and the brand new director of the National Electricity Association, Alcides Jiménez, also resigned.

New publications of the local media pointed this week to the intervention of one of the advisers of Vice President Hugo Velázquez in the negotiations to prevent Paraguay's state power company from trading energy in Brazil, which reopened the controversy.

Then, the Paraguayan government announced the repeal of the act in a movement that allowed it to curb the requests for political trial by the opposition and a sector of the Executive party.

After canceling the minutes, Paraguay and Brazil have called on their two state-owned companies to negotiate a new agreement on contracting energy power in which only the technical sectors intervene and this time excludes diplomats from both states.

. (tagsToTranslate) Paraguay (t) commission (t) study (t) energetic (t) Brazil

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