In Response to Paraguay’s Outcry Over Itaipu Brazil Offers US$ 1 Bi Loan

Itaipu Brazil is planning to offer a financing package worth one billion US dollars for industrial projects in Paraguay, Brazilian financial newspaper Valor Econômico reported. According to the newspaper, which cited unnamed sources, the financing will be offered through Brazil's National Development Bank, or BNDES.

Details of the operation will be unveiled on April 29 during a meeting between Brazilian President Luiz Inácio Lula da Silva and his Paraguayan counterpart, Fernando Lugo.

The financing is a response by the Brazilian government to pressure from Paraguay on the price that Brazil pays for electric power from the bi-national Itaipu hydroelectric facility.

Currently, Brazil's pays US$ 45 per megawatt. Paraguayan officials have demanded changes in the existing contracts that would allow for a considerable hike in line with international prices.

The 14,000-megawatt Itaipu dam was built as a Brazilian-Paraguayan joint venture and began operating in the 1980s. The dam is located at the border of the two countries on the Paraná River and is one of the largest dams in the world. It provides almost all of the energy consumed in Paraguay and 20% of Brazil's entire demand.

Since taking office last year President Lugo has been calling for energy "fairer prices" and a renegotiation of the whole Itaipu operation, since all surplus electricity can only be sold to energy starved Brazil.

The issue has been increasingly controversial, and Paraguay has admitted it's a long term negotiation emulating the situation with that of Panama and the United States over the Panama Canal, a long term negotiation process."

Paraguay so far has rejected several Brazilian financial alternative options plus several infrastructure projects. President Lugo needs windfall earnings to honor much of his electoral campaign promises to invest in social, health and education affairs.

Mercopress

Tags:

You May Also Like

Brazil’s Debt to the Ford Foundation: E Unum Pluribus

The United States of America has long been recognized as a beacon of race ...

In France, This Whole Year, Brazil Is the Word

In 1985 France began a series of Cultural Seasons (“Saisons Culturelles”) which honored foreign ...

Brazilian President’s Popularity Bounces Back

The personal performance of Brazilian President Luiz Inácio Lula da Silva is showing signs ...

Brazilian Presidential Candidates Can’t See Eye to Eye on Mercosur’s Usefulness

Dilma Rousseff, the Brazilian presidential candidate handpicked by president Luiz Inácio Lula da Silva ...

Brazil’s Unions and Industry Oppose Higher Interests

The president of Brazil’s Central Workers’ Union (CUT), Luiz Marinho, and Paulo Skaf, recently elected ...

300 Brazilian Agents Chase Internet Bank Account Raiders

Using more than 300 agents and covering five Brazilian states Brazil’s Federal Police unleashed ...

Brazilians Remember American Sister Dorothy Stang with a Protest

Environmentalists, landless rural workers, and university students took part, yesterday, in a protest in ...

Blue, Beige and Pink Sheep Grazing on the Fields of Brazil

The unaware traveller may be surprised with the colors in the fields of Ipê ...

The Ills of Tobacco and TV in Brazil

A judge in São Paulo, Brazil, found against Souza Cruz and Philip Morris for ...

Calling US Hypocrite Is Not the Best Way for Brazil to Save the Amazon

On July 21, 2008, a researcher from the  Council on Hemispheric Affairs (COHA) met ...