Today, 26 April is the 41st anniversary of the signing in 1973 of the unjust Itaipú Treaty, under which Paraguay sells most of its 50 percent share of the energy from the largest hydroelectric generating plant in the world to Brazil. Under the terms of the Itaipú Treaty, signed in secret in 1973 between the military dictatorships that ruled in both countries at the time, Paraguay must “cede” the unused portion of its 50 percent energy share to Brazil. Sales to third-party countries are prohibited. Paraguay currently uses only 7 million megawatt hours per year and must cede its remaining 38 million megawatt hours to the Brazilian state electricity corporation, Eletrobras, at cost price. The sale price of Paraguayan energy from Itaipú is totally delinked from the soaring world price and the arrangement is of enormous economic benefit to Brazil. The gigantic Itaipú hydro-electric scheme is crucial for the Brazilian economy, providing 17 percent of all its electricity consumption in 2013. The Paraguay Reader includes an article by energy expert Ricardo Canese reflecting on the July 2009 agreement, under which Brazil agreed to triple the payments to Paraguay to US$ 360 million a year, still well below the regional market price for electricity. The 50 year Itaipú Treaty cannot be renegotiated until 2023 unlike the 40-year Yacyretá Treaty with Argentina which expires on 27 May and is now on the brink of being renegotiated.
Posted on: Sat, 26 Apr 2014 12:37:48 +0000