Paraguay faces energy crisis without $5 billion investment by 2030
- Paraguay's domestic electricity demand is rising rapidly, driven by economic growth and aging infrastructure.
- Experts warn that failing to invest $5 billion by 2030 could result in energy blackouts.
- Regulatory barriers hinder private energy investment, necessitating urgent policy reform.
Paraguay, a country historically known for its abundant hydroelectric energy resources, is facing the prospect of an energy crisis if it does not double its power generation capacity by 2030. Experts have warned that domestic demand for electricity is increasing rapidly due to economic growth, aging infrastructure, and a rising need to diversify energy sources. This demand is projected to outpace supply, especially with the country's principal sources- the Itaipú and Yacyretá hydroelectric dams- struggling to meet the growing needs of its population. The Paraguayan economy has seen significant growth, with an average annual rate of 3% over the last decade and a remarkable rebound to 4.7% in 2023. Forecasters expect continued growth of about 4.2% in 2024. However, with such growth typically correlated to a proportional increase in energy consumption, experts such as Guillermo Krauch from the Paraguayan Institute of Electrical Sector Professionals emphasize that the current energy infrastructure will not be sufficient to sustain this economic momentum. Investment is vital; experts indicate that at least $5 billion is needed urgently to expand generation capacity and avoid potential blackouts. Notably, the country has identified 22 suitable locations for small hydroelectric plants, requiring around $1.2 billion to construct. Furthermore, Paraguay's potential for solar energy—especially in the Chaco region—along with biomass and biogas options, signifies avenues for diversification. Nevertheless, the path to achieving energy security is hindered by regulatory gaps that inhibit private company involvement in electricity generation. If investment is not made swiftly, Paraguay could transition from being a leading clean energy exporter to suffering domestic shortages. The need for a well-regulated energy sector is imperative to foster investor confidence and safeguard against the looming threat of blackouts, further highlighting the urgency of reforms and substantial financial commitment.