World’s Largest Hydroelectric Plant Drowning in Political Tension

After nine months of negotiations and two hours of official face-to-face discussions, Brazil’s President Lula da Silva and his Paraguayan counterpart, Fernando Lugo, failed to come an agreement over Itaipu Dam, Brazil’s O Estado do São Paulo reported last night. Completed in 1991, Itaipú is a joint venture between neighboring countries Brazil and Paraguay to generate hydroelectricity from the Rio Parana, the world’s 7th largest river.

According to a treaty signed in 1973, each country retains a 50% claim to the electricity generated. However, over the years, Brazil has dominated the consumption of the energy produced, using 95% of Itaipú’s output to power 20% of the country, leaving 5% for Paraguay. Though, O Estado clarifies that 5% amounts to 90% of the Paraguay’s entire energy needs.

Nonetheless, Lugo, who recently entered office, has cited growing global energy concerns and the financial crisis as among the principal reasons to renegotiate the concessions of Itaipú, threatening to take the matter to international courts in order to resolve the issue.
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World’s Largest Hydroelectric Plant Drowning in Political Tension