Paraguay's plan to double its gross domestic product within a decade faces a critical energy hurdle, according to a technical analysis cited by Ultima Hora. The government's Paraguay 2X initiative, unveiled by the Ministry of Industry and Commerce (MIC) late last year, aims to lift GDP from USD 42 billion to between USD 84 billion and USD 88 billion by 2035, emulating the rapid industrialization of Asian tigers such as South Korea and Singapore.
However, the country's power infrastructure is not keeping pace. Data from the Industrial Union of Paraguay (UIP) and demand forecasts from the National Electricity Administration (ANDE) indicate that Paraguay must add approximately 7,000 megawatts (MW) of new generating capacity over the next decade. That is roughly half the installed capacity of the Itaipu hydroelectric plant, which has 20 units of 700 MW each.
The analysis, titled “Paraguay at the Crossroads: Blackout or Leap to Development?” and prepared by the UIP's Center for Economic Studies, underscores a tight link between economic growth and electricity consumption. For every 1% increase in GDP, electricity demand rises by 1.5%. Without sustained growth in available power, the report warns, GDP can expand at a maximum rate of only 1.8% per year.
To meet the Paraguay 2X target, the economy would need to grow at an average annual rate of 7.5%. Under that scenario, power demand would surge at double-digit rates, requiring nearly 13,000 MW of total capacity by the end of 2035.
ANDE's Master Plan for 2021–2040 outlines a technically sound roadmap, but execution has lagged. Engineer Guillermo Krauch, a member of the Institute of Paraguayan Professionals in the Electricity Sector (IPPSE), told Ultima Hora that the country's economic development risks stagnation unless investment in electrical infrastructure accelerates. He noted that actual consumption peaks are already exceeding technical projections, putting pressure on the need for backup generation.