According to our analyst César Addario, Paraguay is at a historic juncture with the renegotiation of Annex C of the Itaipú Treaty, which will shape the country’s energy strategy for the coming decades.

The Itaipu hydroelectric power plant, with its 20 generating units of 700 MW each, has an installed capacity of 14,000 MW. However, the dam structure includes a reserved space downstream of the spillways, which allows for the installation of two additional turbines without major modifications to the main civil engineering works.

Our Itaipu hydroelectric power plant, with its 20 turbines—each rated at 700 MW—and a total installed capacity of 14,000 MW, is the largest energy asset shared by Paraguay and Brazil. But after four decades of intensive operation, the generating units are nearing the end of their original technical lifespan.

Standard & Poor’s (S&P) raised the sovereign rating to BBB-/A-3 with a stable outlook, following Moody’s upgrade earlier this year. This upgrade represents international recognition of decades of prudent macroeconomic policies, rooted in the democratic transition that began in the 1990s and culminated under the technical and proactive leadership of President Santiago Peña.

Using technology currently available on the international market (more efficient rotors, redesigned blades, and digital exciters and governors), it is possible to increase capacity to 900–920 MW per unit without touching a single dam wall or altering the reservoir level. The result would be an additional 4,000 MW of baseload power using the same head and the same structure built half a century ago.