Paraguay energy security and industrialization challenges

Paraguay is facing significant challenges regarding its energy supply and industrial development. Industry Minister Marco Riquelme has called for utilizing low-cost electricity to foster domestic industrialization, noting that current energy exports to Brazil often result in a $6 billion annual manufacturing deficit within Mercosur as finished goods are re-imported.

However, energy experts warn of an impending crisis. Projections indicate that by 2028, the country could face scheduled power outages of two to three hours during summer peak periods if new generation sources are not incorporated. By 2030, Paraguay is expected to consume 100% of its allocated energy from the Itaipú and Yacyretá dams. Experts suggest the nation may need to import between 500 and 1,000 megawatts of new power annually to meet rising demand, particularly from new electro-intensive industries that require constant, 24/7 power.

Additionally, the nation's reliance on hydroelectric power leaves it vulnerable to environmental fluctuations, such as droughts or extreme water abundance caused by El Niño. In the agricultural sector, there is also a growing push to improve biodiesel production and traceability to meet European deforestation-free requirements.