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WP/21/129
IMF Working Paper
Western Hemisphere Department
Macroeconomic Impact of the Itaipú Treaty Review for Paraguay
Prepared by Natasha Che1
Authorized for distribution by Bas Bakker
May 2021
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Abstract
With the debt obligation of Itaipú Binational being completed paid off by 2023, the Annex C of the Treaty of Itaipú, which governs the operation and revenue distribution of the Itaipú Dam, is due for review and possible revisions. The implications for Paraguay’s export revenues and fiscal position are potentially significant. The paper reviews the current energy distribution and sales arrangements of Itaipú and the potential implication of the Annex C revision for the future.
JEL Classification Numbers: Q2, Q4, H6, E6
Keywords: Renewable Energy policy, Itaipú Binational, Natural Resource Management
Author’s E-Mail Address: NChe@imf.org
I thank colleagues at the Central Bank of Paraguay, as well as Patricia Alonso-Gamo, Bas Bakker, and James Spalding, for their comments and suggestions. All opinions expressed are my own and do not reflect the views of the IMF, its Executive Board, or IMF management.