ASUNCIÓN - The amount of money transferred from the Itaipu Hydroelectric Power Plant, one of Paraguay's main sources of revenue, has decreased as of July 2025 compared to the previous year. According to a Ministry of Finance report, the total amount received by the Paraguayan government from January to July of this year was $303 million, a decrease of $32 million compared to the $335 million received during the same period in 2024.
The biggest reason for this decrease is a sharp drop in compensation for power cession. The compensation for power cession, which was $133 million through July 2024, fell by $23 million to $110 million this year. Royalties, in contrast, increased by $9 million to $150 million, partially offsetting the overall decrease in transfers. The profits and administrative compensation received by the state-owned power company ANDE remained the same as last year at $43 million.
The Itaipu transfers play a crucial role in Paraguay's finances. A portion of the royalties is used for the national budget (PGN) and to support local governments and municipalities. Local governments and municipalities use these funds to promote regional development projects, investments, and essential public works. In particular, the compensation for power cession is entirely incorporated into the National School Lunch Fund (Fonae), making it a critical resource for supporting student meals.
The funds paid to ANDE are also essential for the national power system. This funding provides a stable and predictable source of revenue, which greatly helps ANDE execute its investment plans to provide better electricity services to countless users across the country.
Itaipu is one of the world's largest hydroelectric power plants, co-owned by Paraguay and Brazil. According to the Itaipu Treaty, the two countries share the electricity produced equally, and any power not used by one country can be sold to the other. The royalties, compensation for power cession, and other revenues generated in this process are distributed to both countries. The decrease in compensation for power cession in 2025 has impacted a major source of Paraguay's income, raising concerns about its potential effect on future national fiscal management. The relevant authorities are analyzing the specific reasons for the decrease in transfers and will likely need to seek ways to ensure a stable flow of Itaipu revenues.
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