Presidents of Brazil and Paraguay meet in Brasilia but reach no agreement on Itaipú rates
Brazil’s President Jair Bolsonaro Wednesday did not concede an iota of what his Paraguayan counterpart Mario Abdo Benítez was seeking during a bilateral Summit in Brasilia to discuss Annex C of the Itaipú agreement regarding fees.
Abdo confirmed they had spoken about the revision of Itaipu’s Annex C but no progress had been achieved and therefore no agreement could be announced on the Itaipu rate which Brazil insists on lowering while Paraguay is in favour of keeping it at current levels.
Brazil is going through an electricity supply crisis amid an unprecedented drought and subsequent downspout of its rivers which also has an impact on Paraguay’s exports by ship.
In this scenario, Abdo and Bolsonaro met as Itaipu’s contracting parties for the first time to seek a political solution, but talks remained within a middle ground, according to Abdo.
Paraguay insists on maintaining the 2020 and 2021 tariff of US $ 22.60 per kW of contracted monthly power, to take advantage of the resources that this generates in the strengthening of the electrical infrastructure; while Brazil argues that Annex C of the Agreement should be applied and thus lower the rate to US $ 18 per each monthly kW since the debt for the construction of the hydroelectric plant will be reduced and consequently the rate should fall.
“It was a work meeting, where we have been able to advance. We have been in an intermission room to continue advancing in all the conversations,” Abdo said afterwards. Negotiations with Brazil are monitored under a magnifying glass after Itaipu’s secret act almost cost Abdo his position in 2019.
Bolsonaro also acknowledged they had discussed Annex C, but preferred to praise the infrastructure works between the two countries, such as the Integration Bridge (President Franco-Foz de Yguazú). The Brazilian head of state also announced that in the next few days he will be meeting with Abdo once again in the Paraguayan city of Carmelo Peralta to sign the contract for the start of works on the bridge linking it to Porto Murtinho in Brazil. Annexe C is also to be addressed at that meeting.
Abdo also highlighted the importance of that bridge in the development of the Bioceanic Road Corridor, whereby Mercosur goods will have straight access to ports on the Pacific coast.
Both leaders also praised current joint efforts in the fight against organized crime. Earlier this month, Brazil has donated two helicopters to the Paraguayan police.