Good morning! Brazil-Paraguay energy deal sparks a political crisis in Asunción. Yet another deadly prison riot shocks Brazil. Tensions rise on indigenous land in Northern Brazil. Brazil’s tax burden reaches a new high. Enjoy your read!
Energy deal with Brazil sparks crisis in Paraguay
Back in May, Brazil and Paraguay signed new terms to share the rights over energy produced by the bi-national Itaipu dam—but the deal has only now been disclosed, and it has sparked outrage in the neighboring country. As Brazil claims Paraguay was under-declaring its energy consumption (thus paying less for it), Asunción agreed to pay roughly USD 250m more than before.
Why it matters. After Paraguayans protested the deal, four members of the government were fired—including Paraguay’s ambassador to Brasília. President Marío Abdo Benítez’s administration is being pushed to pull out of the deal. Itaipu’s energy production is split equally between the two countries, with Brazil buying 85% of Paraguay’s half. The dam accounts for 15% of the energy consumed in Brazil. The two countries had been in negotiations for months, as the current contract is set to expire in 2023, which would leave Brazilian distributors exposed.
Proximity. The case is a major blow to Mr....