The treaty that enabled the construction of the Itaipu binational hydro-electrical power plant between Brazil and Paraguay is due for revision in 2023, when it will complete 50 years.

The original treaty stipulated that any excess power from Paraguay's share of the plant's output should be sold to Brazil under commercially favorable terms, which amounted to a form of subsidy meant to reimburse Brazilian investments in the plant's construction ("Annex C").

As the renegotiation of the Itaipu treaty approaches, one question that remains unanswered is whether Brazil will be able to secure facilitated access to Paraguayan power from Itaipu or whether it will be made fully available for Paraguay to sell on the open market.

This question will be answered affirmatively if, and only if, the new Itaipu treaty includes a mechanism that allows Paraguay to sell its power surplus to Brazil at a lower-than-market price (possibly in exchange for further infrastructure investments, etc). This does not include generic statements on energy integration between the two countries or mechanisms that solely serve to reduce transaction costs.

Apr 9, 5:48pm: Will the renegotiation of the Itaipu Treaty include any sort of subsidy to Brazil buying Paraguay’s power production sha → Will the renegotiation of the Itaipu Treaty include any subsidy to Brazil buying Paraguay’s power production share?