MercoPress. South Atlantic News Agency

Paraguay wants Argentina to pay better prices for power from shared dam

Most of Yacyretá hydroelectric dam power is absorbed by Argentina

The presidency of the Paraguayan delegation at the Mercosur Parliament, Parlasur called on Argentina to improve the ‘reduced’ price it currently pays for surplus power from the shared hydroelectric dam of Yacyretá.

Alfonso González Nuñez said that Paraguayan president Fernando Lugo should request a meeting with his peer Cristina Fernandez de Kirchner to address the issue.

“We would like to see President Lugo strongly demand reliable and trustworthy replies (form Mrs. Kirchner) and formal indications that obligations are honoured, and hopefully that he does not feel satisfied with rhetoric statements empty of content”.

The Yaciretá dam is ruled by a contract dating back to 1973 and power generated is shared equally between Argentina and Paraguay, but any surplus power can only be sold to the associate (in this case Argentina) at “a reduced cost agreed by the buyer and which is well below spot market rates”.

The statement from Parlasur adds that conditions and disbursements are “frankly unfavourable for the supplier” Paraguay, and accuses Argentina of attempting to force the Paraguayan Treasury to assume debts incurred by “the sloppy and clumsy management of Argentine authorities”.

Under these conditions Yacyretá continues to be “a brilliant deal for our partner (Argentina) and a heavy burden for Paraguayan national interest”.

The presentation is similar to that of the Itaipú treaty which rules the world’s largest operational hydroelectric dam, shared by Paraguay with Brazil, and which also stipulates that surplus power can only be sold to the partner.

After long exhausting, sometime irritating negotiations Paraguay finally managed to have annual payments for the surplus power trebled from 120 to 360 million dollars annually.

However during his electoral campaign (2008), President Lugo said that at current power prices, Brazil should be paying Paraguay almost 3 billion dollars annually for the surplus power.