Former Brazil minister appointed Itaipu dam director

Former Brazilian Defense Minister Joaquim Silva e Luna was appointed new Brazilian director-general at the Itaipu hydroelectric dam, on Paraná river, on the border between Brazil and Paraguay. The move was officially announced today (Feb. 21). Vice-Admiral Anatalício Risden Júnior will take the helm of the plant’s financial board. The two come to replace Marcos Vitório Stamm and Mário Antônio Cecato, respectively. Their tenure ends on May 12, 2022.

Luna will lead the Brazilian portion of the dam, run by Paraguay and Brazil, and will be tasked with resuming the talks on a section of the Itaipu Treaty entitled Anexo C. Signed in 1973, the treaty stipulates the revision in 2023 of values for the energy sold to Brazil from the part assigned for Paraguay. Each of the two countries has the right to have half of the energy produced.

General Joaquim Silva e Luna - Fabio Rodrigues Pozzebom/Agência Brasil

Work group

On February 13, the Ministry of Mines and Energy assembled a work group to conduct the studies for the revision of the Itaipu Treaty. The group was given 60 days to devise a plan with the stages for the conclusion of the studies.

Among other issues, the discussion should focus on the revision of the Anexo C, which deals with tariff costs and the possibility of allowing energy produced at the plant to be sold to any buyer, not just between Brazil and Paraguay. After this date, a new revision will only take place in 2073.

The energy sold to Brazil serves consumers in the country’s South and Southeast. A reduction in the amount sold to Brazil or a price hike could change Brazil’s energy costs.

The tariff at Itaipu is cost-based, and a key component of this calculation is the payment of an approximately $27 billion debt, incurred in the construction of the plant. This loan, whose payment accounts for two thirds of the tariff, is expected to be settled by 2023.

Clean energy

With a budget of $3.5 billion, Itaipu is the world’s top producer of clean and renewable energy, with 20 generation units and 14 MW of installed power. Today, the plant accounts for 17 percent of Brazil’s electricity market and 85 percent of consumption in Paraguay.

Retired General Silva e Luna was the first military man to serve as defense minister. Luna holds a PhD in Military Sciences from the Army’s Escola de Comando e Estado-Maior.

The new financial director, vice-Admiral Anatalício Risden Júnior holds a master’s degree in Naval Sciences and a PhD in High Studies on Maritime Politics and Strategy. He has been a consultant with Fundação Getulio Vargas (FGV) since 2015.