Paraguay, blessed with one of the cleanest electricity grids in the world, faces a crucial dilemma: how to modernize its electricity sector to meet demand that is growing at a breakneck pace—18.4% in 2024 alone, according to ANDE—without sacrificing its energy sovereignty or driving up the cost of a resource that is a source of national pride.

The impact on public debt reached USD 18.33 billion (40.7% of GDP, USD 45 billion), with external debt amounting to USD 12.47 billion (27.7% of GDP). A pension fund system could mobilize domestic savings, reducing reliance on external borrowing. Paraguay’s formal workforce comprises 1.18 million workers, with an average monthly wage of USD 413. A 10% contribution (USD 41.3 per worker) would generate USD 584.9 million annually (1.18 million × USD 41.3 × 12).

How AFPs Work: AFPs are private financial institutions that manage pension funds under an individual capitalization scheme. Unlike the pay-as-you-go system of the Social Security Institute (IPS), where contributions from active workers finance current pensions, AFPs operate as follows: Each worker contributes a percentage of their salary (typically 10–15%, as in Chile; 10% or 13% in Peru) to an individual account.