MercoPress. South Atlantic News Agency

Energy dispute: having agreed with Brazil, Paraguay now targets Argentina

Yaciretá on the Paraná River generates 3.000 MW/hour

After having reached an understanding with Brazil, Paraguay next month plans to begin negotiations with Argentina to claim better conditions for the power generated from the Yaciretá dam which both countries share.

“We want to establish with Argentina a negotiations agenda regarding Yaciretá as we did with Brazil and the Itaipú dam”, said on Wednesday Paraguay’s Foreign Affairs minister Hector Lacognata.

Contrary to Itaipú where Paraguay was demanding a fairer price for the sale of its power surplus share, negotiations with Argentina will focus on the huge debt of the undertaking, which remains unpaid, and how it will be split between the two partners.

According to experts the Yaciretá hydroelectric dam debt with the Argentine Treasury is in the range of 10.5 billion US dollars. However Paraguay’s opposition argues that over half that debt is “illegitimate”.

Argentina on several occasions tried to condone Paraguay’s debt in exchange for the energy generated by the dam which was begun to be built in 1982. Yaciretá built on the Parana river shared by the neighbouring countries has an hourly capacity of 3.000 MW.

This represents 15.000 Gigawatts annually, which is planned to be expanded to 20.000 GW by 2011. Itaipú shared with Brazil has a power capacity of 94.000 GW annually.

The two major undertakings were planned to supply power to South America’s two largest economies, with Paraguay absorbing at the most 5% of each.

Dealing with Brazil and Argentina on the Itaipú and Yaciertá dams was the core of current Paraguayan president Fernando Lugo electoral campaign promises.

Last Sunday Lugo and his peer Lula da Silva signed an agreement which grants a significant portion of Paraguay’s demands, including fairer prices for power and several infrastructure investments.

“The administration of President Lugo wants to have clear dealings with Brazil and Argentina, which demands a set of priorities to be agreed on a round of negotiations”, said Lacognata.

“As we did with Brazil, we want to establish a round of negotiations with Argentina”.