MercoPress. South Atlantic News Agency

Paraguayan president insists in recovering Itaipu “energy sovereignty”

Itaipu is becoming an increasingly irritating dispute for Paraguay and Brazil

President Fernando Lugo reiterated Friday that Paraguay did not yield and will not yield “energy sovereignty” claims for power generated from South America’s largest hydroelectric dam Itaipu which it shares with neighbouring Brazil.

“This government took office with the promise that it would claim energy sovereignty from Itaipu, which the Paraguayan people have assumed as proper and fair, and will ultimately mean victory for the people that have been for so long exposed to abandonment and complicity from previous governments”, said Lugo during the inauguration of the seminar for “Recovery of hydroelectric sovereignty for the benefit of national development”.

However President Lugo admitted that his less than a year administration has not achieved much from the ongoing negotiations with Brazilian representatives, but underlined that Paraguay will not yield and if it took Panama 74 years to recover the canal sovereignty, “for us with only 35 years of Itaipu, we are just beginning to mumble our first wishes and most fair claims”.

Lugo said that anyhow a new level of discussion has been reached with the Brazilian government, which in unparallel, because it had never been achieved before for different reasons, but the Paraguayan position remains unchanged in the six basic points considered as priorities for any negotiation with Brazil.

The six points include: free disposal of Paraguayan energy to be sold to those markets which offer the best prices; Fair price and increased compensation for the Paraguayan power ceded to Brazil; Review of Itaipu debts and lowering the rate (7.5%) charged by Electrobras; Co-management or rotation of the technical and administrative departments; Review of Itaipu administration by Paraguay’s and Brazil’s Government Accounts Comptrollers; Conclusion of pending works at the Itaipu complex.

Itaipu in the heart-land of South America was built in the seventies with Brazil absorbing 95% of the power generated since Paraguay’s demand is supplied with 5% of production.

However since Brazil paid for the dam, it is the sole manager both financially and technically.

Paraguay is demanding current prices for the surplus power sold to Brazil, which currently is traded by contract, at the original price of the seventies.

Paraguay needs the extra money for infrastructure and social investments. Brazil argues the low price for power helps compensate the huge pending debt from the construction of the Itaipu complex.