Power

Energy crisis a three-headed monster for Bolsonaro

The risks of energy rationing worry the Bolsonaro government on multiple fronts: inflation, uncertainty, and political decay

energy President Jair Bolsonaro flies over the Itaipu Dam, co-owned by Brazil and Paraguay. Photo: Alan Santos/PR
President Jair Bolsonaro flies over the Itaipu Dam, co-owned by Brazil and Paraguay. Photo: Alan Santos/PR

The most severe drought in 91 years has pushed Brazil’s primarily hydroelectric energy system to its limit. Reservoirs are at their lowest levels since 2001, putting the country on the precipice of its third electricity crisis in two decades.

Investors and consultancy firms had been monitoring the situation but were taken aback when House Speaker Arthur Lira — a government ally — said last month that the administration could begin rationing electricity. He quickly amended the statement, but it was too late: the looming energy crisis dominated newspaper headlines and economic discussions in Brazil.

A week later, the Mines...

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