Paraguay's electricity sector faces an imminent crisis, with two reform proposals under debate in the Legislative and Executive branches, without consensus on which path to follow. While the government moves forward with creating an Energy Ministry and a regulatory body, a bill introduced in the Senate proposes splitting state-owned ANDE into six companies and opening the market to competition.
Former ANDE officials, such as engineers Pedro Ferreira and Fabián Cáceres, sent a document to the head of the Civil Cabinet, Javier Giménez, warning that creating new institutions does not solve urgent operational problems. They highlight that energy demand is growing at an accelerated pace, surpassing the capacity for infrastructure expansion. Essential projects, such as the 500 kV line between Yguazú and Valenzuela, are delayed and are only expected to begin operation by the end of 2027, compromising system stability.
Another critical point is the renewal of contracts with electro-intensive industries, such as cryptocurrency mining, which consume 1,300 megawatts and have agreements in force until 2027. Uncertainty over the Itaipú tariff starting in 2027 and the end of the binational social funds, which financed part of the electrical infrastructure, increase the uncertainty. Experts warn that, without planning, the country could face an energy deficit between 2030 and 2032, with the risk of cuts for large consumers.
The bill introduced by Senator Enrique Salyn Buzarquis proposes a structural reform of the sector. The proposal envisions dividing ANDE into six corporations: Acaray SA (generation), Transmisión Eléctrica del Paraguay SA (transmission), Centro de Operación del Sistema Eléctrico Paraguaio SA (system operation), eight regional distributors, and two marketers—one for the regulated market and another for the free market. The initiative also creates a Superintendency of Electricity, an autonomous and independent body, to regulate tariffs and oversee the sector, as well as an Operator of the Paraguayan Electricity Market (OMEP), which would be selected through bidding.
The bill establishes a three-year schedule for the gradual implementation of the competitive market, with stages that include separating the system operator from the market operator. The explanatory memorandum points out that ANDE has operated with negative profitability since 2021, reaching -3.82% in 2024, and that peak demand has grown 6.6% per year, potentially exhausting the capacity of Itaipú and Yacyretá by 2032. For reform advocates, fragmenting the state-owned company and opening the market would attract investments, but critics argue that the measure could increase bureaucracy and delay urgent technical solutions.
Engineer Ángel Recalde, former director of Yacyretá, acknowledges the problems raised by former ANDE officials but argues that an independent regulatory body would give more confidence to investors. Meanwhile, the state-owned company must define the tariff for electro-intensive industries this month, amid a scenario of uncertainties and disputes over the future of the sector.