Paraguay is accelerating negotiations with Brazil over the Itaipú Treaty’s Annex C, which governs pricing and distribution of energy from the 14,000 MW Itaipú hydroelectric dam, as the country simultaneously experiences rising interest in AI and data center investment. The talks aim to revise decades-old terms under which Paraguay’s surplus electricity—capable of powering the country multiple times over—is sold or ceded to Brazil at historically low rates. This shift comes as international firms pursue new data center projects in Paraguay, attracted by its near-100% renewable hydroelectric grid, low energy costs, and investment-grade credit ratings. Officials and industry figures argue that revising the treaty could unlock greater domestic value from surplus energy, especially as AI workloads and compute infrastructure demand rapidly increases. At the same time, Paraguay is investing in digital infrastructure and exploring expansion of power generation capacity, positioning itself as an emerging hub where energy policy, infrastructure development, and artificial intelligence investment are increasingly converging.
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