MercoPress. South Atlantic News Agency

Argentina continues to block sale of Paraguayan power to Uruguay

“More demands from Argentina”, claims Paraguayan minister Emilio Buongermini

The sale of power from landlocked Paraguay to Uruguay continues to be delayed because Argentina has come up with more demands before it allows transmission through its grid, according to Paraguayan officials.

The issue was analyzed on Monday at top level between Paraguayan president Fernando Lugo and the country’s Energy Board.

Argentina had promised a positive reply for the end of May in coincidence with the bicentenary of Paraguay’s independence “but so far Argentina continues to come up with more demands in the negotiations”.

“Argentina has come up with demands linked to what we can describe as the toll and some other compensation which originally were not considered in the negotiations”, said Emilio Buongermini, Paraguayan Deputy Minister for Mines and Energy.

Paraguay is willing to pay Argentina 10 US dollars per MW/hour for use of its transmission grid connected to Uruguay, but apparently the government of President Cristina Fernandez is “not satisfied”.

“This is the going rate in the region, and we don’t see why Paraguay should pay more”, said Buongermini.

Another issue on the table demanded by Argentina is that the power sold to Uruguay should not originate in the shared Paraguay/Argentina hydroelectric complex since this would be contrary to contract conditions related to surplus power.

Paraguay has promised and given evidence that the power would originate in its Acaray hydroelectric dam.

“Obviously it is difficult to identify the origin of power, when you turn the light on you don’t have a clued where power comes from, Yaciretá or Itaipú”, said the Paraguayan official.

“Nevertheless we have given guarantees that can be checked by the Argentines that the power for Uruguay comes from our Acaray dam, and they know that”, underlined Deputy Minister Buongremini.

Paraguay is one of the few countries in the world with surplus power originated in two huge hydroelectric dams shared with Argentina and Brazil, Yaciretá and Itaipú. Both dams generate anywhere from 18% to 25% of Paraguay’s Mercosur senior partners Argentina and Brazil total power provision.

However under strict contract conditions Paraguay is only allowed to sell surplus power to its partners and at prices agreed decades ago, which obviously hold little relation to current spot markets.

Paraguayan current president Fernando Lugo put an end to sixty years of conservative-crony governments promising an end to corruption and “energy sovereignty”.