Paraguay, with a 100% renewable energy mix based on hydroelectric power, is seeking to advance toward an energy transition that diversifies its power generation with natural gas and non-conventional renewable sources. The construction of a natural gas pipeline from Argentina, combined with the opening of the electricity market to the private sector, represents a strategic opportunity to modernize the grid, improve electricity distribution, and establish itself as a competitive and sustainable regional energy hub.

Paraguay, a country with an energy mix historically dominated by hydropower, faces a critical challenge by 2030: meeting rapidly growing energy demand while ensuring sustainability, energy security, and economic development. With almost total reliance on the Itaipú, Yacyretá, and Acaray dams, which generate 100% of the country’s electricity, Paraguay boasts a unique renewable energy mix.

Paraguay faces a critical crossroads in its pension system, marked by low coverage, inequities, and the risk of fiscal collapse. Against this backdrop, the proposal for a structural reform based on individual capitalization is gaining momentum as an alternative to the current pay-as-you-go model. In this article, our international analyst, César Addario Soljancic, explores in depth how this transition could be implemented, its impacts on workers, lessons from countries such as Chile and Costa Rica, and the keys to achieving a more sustainable, equitable, and modern system in the Paraguayan context.

In this article, our economic analyst César Addario, economic advisor to Salvadoran President Nayib Bukele, proposes the creation of a universal pension of 1,500,000 guaraníes per month for all individuals over the age of 65 in Paraguay. The initiative aims to ensure a dignified retirement without the need for prior contributions or tax increases, through a financing model based on budget reallocations, revenue from binational companies, and the fight against tax evasion.

Paraguay is facing a structural crisis in its pension system, characterized by informality, inequality, and a lack of sustainability. In this analysis, we explore why pension reform in Paraguay—based on a hybrid model that combines a state-run pay-as-you-go pillar with private individual capitalization—could offer a viable solution.