Electric power: Argentina and Paraguay strengthen their relations to boost the Yacyretá hydroelectric plant

The presidents of Paraguay, Mario Abdo Benítez, and of Argentina, Alberto Fernández, pose in front of the expansion works of the Yacyretá dam on the Paraná river, on May 30, 2022.
The presidents of Paraguay, Mario Abdo Benítez, and of Argentina, Alberto Fernández, pose in front of the expansion works of the Yacyretá dam on the Paraná river, on May 30, 2022.NORBERTO DUARTE (AFP)

Diplomatic relations between Argentina and Paraguay are strengthened. The expansion works of the Yacyretá binational hydroelectric brought together presidents Alberto Fernández and Mario Abdo Benítez in Ayolas, a town located on the Paraguayan side of the dam. The excuse was to review the progress of the work on the Aña Cuá landfill, on the Paraná River, where turbines are being installed that will increase the complex’s power generation capacity by 10%, today at 3,200 MW. Yacyretá is the cement that unites both countries, forced to understand each other in the shared administration of that mega-work born from the agreement between two dictatorships in the seventies.

Fernández and Abdo Benítez are at opposite ideological poles. Furthermore, Argentina and Paraguay do not have the best relations in Mercosur, the bloc that they form together with Brazil and Uruguay. The Paraguayan Government requests, together with that of Montevideo, that the authorization of the rest of the partners is not necessary to sign commercial agreements with third countries. Yacyretá, moreover, was not always the engine of unity.

Since its construction in 1983 in the waters of the Paraná River, Paraguayans denounce that the dam, the result of an understanding between the military dictatorships that ruled both countries in the 1970s, threatens the economic sovereignty of their country and only benefits Argentina. Both countries were trapped in an alley for more than 30 years that prevented any understanding. Argentina demanded from Paraguay the cancellation of 17,000 million dollars that it contributed to finance the works. Paraguay insisted that they had put most of the territory flooded by the dam without charging for it and also received crumbs for electricity that they did not use and sold to their partners in the south.

The issue was resolved only in 2017, when presidents Mauricio Macri and Horacio Cartes signed a memorandum of understanding. When the construction of the dam was agreed in 1973, the Paraguayans assumed a debt that, with this agreement, was reduced by 80% thanks to the removal of interest accumulated since 1992, to 3,800 million dollars, to be paid in a term of 20 years and 10 years of grace. Argentina, for its part, promised to pay Paraguay from next year and for 10 years almost 1,000 million dollars for having contributed 80% of the territory that the dam left under water.

That agreement, still in force, unlocked works that were suspended due to the fight. One of them is the one that Fernández and Abdo Benítez visited this Monday. “The president asked me a long time ago to visit him so that we can see the progress of these works. It adds more energy for the two countries, when energy is in high demand. It employs 900 people and indirectly another 2,000”, said the Argentine. “This project increases production capacity and is an example of integration. Once it works, Paraguay and Argentina will have almost 10% more than what Yacyretá produces today, in clean and renewable energy”, added the Paraguayan.

Since June 2020, the dam has been installing three Kaplan-type turbines with 90 MW of power each in the Aña Cuá arm spillway, where the water that the dam returns to the Paraná River for environmental reasons comes out. The current flow of about 1,000 m3 per second will be maintained after the installation of the turbines, but will now generate extra energy. The idea is that the work will be finished in 2024.

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