A new government and the world’s largest generator of renewable energy are helping to ensure Paraguay’s economy remains stable and sustainable.
Paraguay is one of Latin America’s fastest-growing economies, with the IMF estimating that its gross domestic product will grow by around 4 percent a year until at least 2023. The pillars of this stable economy are agriculture (it is one of the world’s top-ten beef, soya and corn exporters) and renewable energy. Now, President Mario Abdo Benítez is utilizing this natural wealth to build a more diversified and competitive economy. His strategies for this include developing the young population’s skills and employing technology to create a knowledge economy, introducing manufacturing and services clusters, as well as encouraging innovation and foreign investment. The well-connected and business-friendly country already offers attractions for investors. Not least, says Minister, Secretary General and Chief of the Civil Cabinet of the Presidency of the Republic of Paraguay Julio Ullón Brizuela, “It is strategically located at the center of South America, making it an excellent gateway to more than 200 million consumers in the Mercosur common market.”
One of the seven wonders of the modern world Another major advantage Paraguay has is the huge and reliable electricity supply from the hydroelectric plant it shares with Brazil: ITAIPU Binacional, which generated 96,585,596 MWh of energy in 2018. “It is the world’s largest producer of clean and renewable energy, and Paraguay’s most important asset,” says Paraguayan Director General José Alberto Alderete. Nearly 26,000-foot long and 650-foot high, with 14,000 MW of installed power, ITAIPU supplies over 90 percent of Paraguay’s energy and around 20 percent for Brazil. But energy production is only one example of how ITAIPU impacts Paraguay. It is also at the forefront of four other country priorities: social responsibility, environmental protection, tourism and technological advance.
In terms of social responsibility, Alderete states, “ITAIPU pays royalties of over $1 billion a year to the central government. We are also strengthening, modernizing and expanding Paraguay’s energy distribution network.” In addition to hydropower being a green energy, ITAIPU protects the environment by avoiding the use of over 500,000 barrels of oil a day and, he says, it has strengthened over 100,000 hectares of forest reserves around the plant in projects with organisations like the Smithsonian Institute and the World Bank. These reserves are also attracting tourists, he notes: “In the first half of 2018, we saw an increase of 8 percent in visitor numbers—about 500 thousand people. However, there is a lot more tourism potential in our dam, environment, reserves, zoo, research center and museums.” Alderete’s main focus is on the future: “ITAIPU has to be at the forefront of technology.” For this reason, the plant is being transformed from analog to digital, a 14-year process involving an investment of almost $700 million. Other changes are also in the pipeline. “In 2022, Paraguay and Brazil become joint owners and ITAIPU will have settled all its debts. We will be in a position to sell electricity to third parties,” he says. The relationship between the partners is warm, to the extent that, “ITAIPU is financing two bridges between our countries to consolidate their integration,” states Alderete. He calls on investors from around the world to visit Paraguay and see the advantages it offers, “Which include, of course, clean energy in abundance and at a reasonable cost.”