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HydropoliticsThe Itaipu Dam, Sovereignty, and the Engineering of Modern South America$
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Christine Folch

Print publication date: 2019

Print ISBN-13: 9780691186603

Published to Princeton Scholarship Online: May 2020

DOI: 10.23943/princeton/9780691186603.001.0001

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(p.201) Conclusion

Christine Folch

Princeton University Press

This chapter talks about future possibilities relating to the Itaipú Binational Dam. In 2023, important parts of the binational treaty must be renegotiated, and the financial arrangements are once again up for grabs. That year, unless an additional US$4 billion in debt is discovered, the massive construction debt will be paid off. But it is unclear how this will affect the tariff. If the present tariff formula holds and energy production costs are the limits for the energy price, the tariff will plummet by more than 60 percent. Energy experts are concerned that this will lead to haphazard energy waste by the largest consumers, rather than a strategic industrialization plan. On the other hand, politicians in the Paraguayan executive and legislative have begun discussions on what to do with US$1 billion more in royalties. But the hydrostate history of Itaipú illustrates the weaknesses in either transferring more energy rent to the Paraguayan government without enforceable development investment plans or of effectively subsidizing Paraguay's current electricity users, who are disproportionately wealthy, without implementing a strategy to increase energy access to the vast majority of Paraguay.

Keywords:   Itaipú Binational Dam, tariff formula, energy price, tariff, industrialization, hydrostate, Paraguay, electricity

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