Lula: Paraguay should be Brazil’s “privileged partner”
Brazilian President Lula sets off this Monday (Aug. 14) for Asunción, Paraguay, where he should attend the inauguration ceremony of the neighboring country’s new president, Santiago Peña, slated to be held Tuesday (15).
“The new president, I believe, is a young leader with a sharp intellect who shows genuine concern with his nation’s ties with Brazil,” Lula said during his Conversa com o Presidente, on Canal GOV. In the interview, he underscored the need to elevate Paraguay to the status of a “privileged partner” of Brazil.
Peña emerged victorious from the election on April 30 and has visited Brasília twice this year, engaging in meetings with President Lula on May 16 and July 28.
Lula advocated investments in Paraguay and the expansion of bilateral ties, stressing that Brazil’s economic growth must also open avenues for neighboring nations to prosper.
“Why did we decide to make a transmission line from Itaipu, in Foz do Iguaçu, to Asunción? Because Asunción was facing power shortages on a daily basis. How can a country getting half of Itaipu’s power still have to deal with shortages? So our intention in providing energy was to encourage Brazilian companies to produce in Paraguay, generating jobs and opportunities for the people there. They deserve no less than us,” the Brazilian president argued.
The Itaipu dam
During one of Peña’s visits to Brazil, he emphasized that Paraguay must overcome the challenge of harnessing the energy produced by Itaipu as a means to ensure the nation’s development and the creation of employment.
Half a century after the Itaipu Treaty was inked, Brazil and Paraguay are collaborating to revise its Annex C, which concerns its financial basis and the provision of electricity services in the venture. The bi-national enterprise has an annual budget of some $3.5 billion—nearly 70 percent of which had been previously allocated to paying Paraguay’s debt for the construction of the hydropower plant on the Paraná river, funded by Brazil.
With the debt fully repaid in February this year, Annex C could be revised, in accordance with the terms of the treaty itself.
Itaipu Binacional stands as a global leader in clean and renewable energy generation, with 20 generating units and 14 gigawatts of installed capacity. Boasting a production of 69.8 million megawatts of energy in 2022, the plant supplied 8.6 percent of the Brazilian electricity market and accounted for 86.3 percent of Paraguay’s consumption.
Bilateral agenda
As it stands today, Brazil is the top trading partner of Paraguay, which is home to the third largest Brazilian community abroad, trailing only the US and Portugal. It is estimated that 245 thousand Brazilians currently reside on Paraguayan soil. In addition to the power plant, bilateral relations encompass key interest areas, such as combating illicit activities, trade, and investment.
In 2016, the two nations entered another agreement for the construction of an international road bridge over the Paraguay river, linking Porto Murtinho in Mato Grosso do Sul, Brazil, with Carmelo Peralta, in Paraguay. The endeavor should come as part of the Bioceanic Road Corridor and started in January 2022. The project is likely to be completed by December 2024.
