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The Itaipu treaty is close to expiration, creating risks for Brazil and Paraguay

The renegotiation of the treaty’s Annex C is a sensitive issue for both countries — and there is little transparency around how talks are progressing

The Itaipu treaty is close to expiration, creating risks for Brazil and Paraguay
Tourists visit the Itaipu dam’s control room. Photo: Tupungato/Shutterstock

In August 2023, the current treaty concerning the commercialization of energy produced by the massive Itaipu dam, a binational hydroelectric plant co-owned by Brazil and Paraguay, is set to expire. 

Signed 50 years ago, the so-called “Annex C” establishes that Brazil and Paraguay are entitled to an equal 50-percent share of the energy. The 20 power-generating units at Itaipu have a 14,000 MW capacity. Annex C also forces Paraguay, a sparsely populated country with a demand for power that is dwarfed by Brazil’s, to sell the unused share of its cut to Brazil. Negotiations with other countries are expressly prohibited.

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