MercoPress. South Atlantic News Agency

Brazil and Paraguay cut down energy prices at Itaipu

Brazil had pushed for an even deeper cut to US$ 18.95, after which a compromise price was agreed upon

Authorities from Brazil and Paraguay have announced a reduction in the price of energy from the binational Itaipu power plant from US$ 22.60 to US$20.75 per kilowatt.

This new change is expected to impact household utility bills, thus strengthening Brazilian President Jair Bolsonaro's fight against inflation.

Read also: Brazil's inflation for July 2022 best in 42 years

Brazil's Ministry of Mines and Energy reported that Itaipu's new energy rates will generate revenues worth US$ 220 million for each country.

The Itaipu binational hydroelectric power plant is the second largest in the world, after China's Three Gorges.

Meanwhile, Itaipu's chief on the Paraguayan side Manuel María Cáceres highlighted the relationship with Brazil that led to the 8.2% decrease.

“When there is good dialogue and a good relationship, results can be obtained. Obviously, in a negotiation you cannot reach 100%; we are satisfied with what we achieved,” the Paraguayan official underlined in a radio interview.

Following the agreement between the two countries, the Paraguayan Government decided to apply a 25% discount on Administración Nacional de Electricidad ANDE fares until December of 2022 for specific users with a consumption of up to 1,000 kV/h and who are not benefitting from differentiated social aid rates.

“This is not something new. Many say that it is for electioneering issues,” Cáceres also argued. “We are satisfied with the result we have obtained. The debt for Itaipu will be paid in full in February of next year, but we will soon start negotiating the fares for 2023,” he went on.

Brazil had pushed for an even deeper cut to US$ 18.95, after which a compromise price was agreed upon.