MercoPress. South Atlantic News Agency

Brazil reminds Paraguay that Itaipu power is jointly shared and managed

The giant Itaipú dam that provide 22% of Brazil’s power consumption

Brazil reminded Paraguay it can use the power it needs from the giant Itaipu hydro but there is a contract which regulates how to manage the surplus. A day earlier president Federico Franco said that Paraguay would not “yield” any more electricity to Brazil.

“Generation, distribution and prices for electricity from Itaipú are the result of a bilateral accord which is effective”, said the spokesperson for the Brazilian Foreign ministry, Tovar Nunes on Thursday.

“The energy which Paraguay does not consume goes to Brazil, but this power is paid for, “not yielded”. Brazil does not obtain electricity from Itaipú free”, added Nunes remembering that in 2011 became effective a review of the original accord which trebles Brazil’s annual payment from 120m to 360m dollars for the energy to which Paraguay has a right but does not consume.

The Brazilian official said that Paraguay has the right to reduce the power it sells to Brazil, if it needs more for domestic consumption, “but the treaty anticipates that the surplus energy can’t be sold to third parties”.

Itaipú is the world’s largest operational hydroelectric dam shared by landlocked Paraguay (6.5 million pop.) and Brazil (190 million), but the junior member of Mercosur never consumes more than 10% of its share, so under contract must sell the surplus to Brazil.

The price paid for the electricity based on rates dating back to 1975 when the construction started have always been a source of controversy and acrimonious dispute between the two countries, although Brazil is far more effective.

President Franco warned on Wednesday that its government “will no longer yield energy” to its neighbours in direct reference to power from Itaipu and from Yaciretá, which is a smaller hydro and shared between Paraguay and Argentina.

The Brazilian Foreign ministry spokesperson said that Brasilia has not been informed of any modifications referred to the shared relation in Itaipú.

Itaipu generates sufficient power to supply 22% of Brazil’s electricity consumption and since Paraguay only makes use of 5% of its half share, the rest is sold to Brazil.

Brazil and Argentina support Fernando Lugo who was removed from office by the Paraguayan congress and do not accept his replacement, Federico Franco.