# Paraguay-Brazil Itaipú Annex C negotiations stall at the Mercosur summit as the December 2026 deadline approaches > Paraguay and Brazil failed to reach agreement on a revised Annex C electricity-sharing formula at the Mercosur summit in Asunción on 2 July 2026, despite a countdown to the expiry of the 2024 bridge tariff and the 2007 Operational Agreement; Paraguay's electricity utility ANDE has acknowledged the dual expiry will require a fundamentally new negotiating structure from January 2027 **Meta:** type: story · date: 2026-07-02 · heads: 誰の金か, 長期戦 · 6 takes · 5 lenses · 1 regions ## Summary Paraguay and Brazil have not reached a formal revision of Annex C of the Itaipú Treaty as of July 2026, and the June-July Mercosur summit in Asunción produced no breakthrough. Two parallel agreements expire December 31, 2026: the May 2024 Peña-Lula bridge tariff (US$19.28/kW-month, set for a two-year interim), and the 2007 Operational Agreement that grants [Paraguay](/ja/entity/paraguay)'s electricity utility ANDE preferential access to Itaipú surpluses at low cost. ANDE has publicly acknowledged the dual expiry forces a "new form of negotiation" for power supply from January 2027. The 2024 bridge deal, which both governments described as "historic," generates approximately US$1.25 billion per year for Paraguay, but Paraguay has long argued its fair share of Itaipú's output is worth significantly more under market pricing. A civil society proposal circulated in April 2026 called for sextupling Paraguay's compensation and restructuring ownership into a Paraguay-Brazil-Argentina holding company. A separate US-backed energy deal for Itaipú output is reportedly under discussion, which would potentially allow Paraguay to sell its electricity share to buyers outside the bilateral treaty framework. Foreign ministers Rubén Ramírez Lezcano and Mauro Vieira met in March 2026 to restart talks frozen by a 2025 espionage scandal, but the Mercosur summit produced no tangible result. ## The split Paraguay's government, led by President Santiago Peña, has insisted the current bridge tariff is a floor, not a ceiling, and that a formal Annex C must deliver materially higher revenue. Brazil under President Lula has resisted price increases that would raise electricity costs for Brazilian industry and has insisted Itaipú is a bilateral matter that cannot involve third parties (a position directed at US deal-making proposals). The Paraguayan opposition and civil society groups have criticised negotiations conducted without public transparency, citing the 53-year treaty's anniversary as a moment for structural rethink. The US angle, potentially allowing Paraguay to sell power to international buyers, is the most disruptive element: if Asunción pursues it, it challenges the treaty architecture at a fundamental level. ## By the numbers - US$19.28/kW-month, bridge tariff set in the May 2024 Peña-Lula agreement - US$1.25bn, approximate annual Itaipú revenue for Paraguay under the 2024 terms - December 31, 2026, expiry of both the 2024 bridge tariff and the 2007 Operational Agreement - 53 years, age of the Itaipú Treaty as of April 26, 2026 - 14 GW, Itaipú's total installed generating capacity (one of the world's largest hydroelectric plants) - 1, Mercosur summit in 2026 (Asunción) at which Annex C produced no outcome ## Why it matters Itaipú is the single most important infrastructure asset in Paraguay's economy. The electricity revenue it generates is a meaningful share of Paraguay's GDP and funds significant public investment. If Paraguay and Brazil reach January 2027 without a successor agreement, the legal and financial framework for Itaipú's operations enters undefined territory. The US energy deal option, if pursued, would be the first time Asunción has sought to operationalise Paraguay's treaty right to sell its electricity outside the bilateral arrangement, a move Brazil would likely contest legally and diplomatically. ## What to watch - Whether Paraguay and Brazil reach a formal Annex C agreement before December 31, 2026. - Whether Paraguay advances formal talks with US counterparts on redirecting Itaipú electricity output to third buyers. - Whether the Mercosur summit failure triggers a harder Paraguayan negotiating posture or a political crisis at home. - Whether ANDE secures alternative power supply contracts for 2027 in case the Operational Agreement is not renewed. ## Regional takes (batched by bias / lens) ### Paraguay's leading daily; confirmed absence of progress at the Mercosur summit despite public pressure - **ABC Color** (Paraguay, es) — Reported that the Mercosur summit hosted in Asunción in late June-early July 2026 produced no progress on Itaipú Annex C renegotiation, despite public statements from Foreign Minister Ramírez Lezcano in March that talks had restarted. Former ANDE president Pedro Ferreira confirmed that Annex C will not enter into force by January 2027 as originally planned. > "Itaipú: sin avances sobre Anexo C en la Cumbre del Mercosur pese a la cuenta regresiva para el vencimiento de los acuerdos." Source: https://www.abc.com.py/economia/2026/07/02/itaipu-sin-avances-sobre-anexo-c-en-la-cumbre-del-mercosur-pese-a-la-cuenta-regresiva/ ### Detailed economic context on the bridge tariff and the dual expiry risk - **ABC Color** (Paraguay, es) — Reported that the Peña-Lula bridge tariff of US$19.28/kW-month, agreed in May 2024, expires December 31, 2026, and that no successor arrangement is in place. Detailed the 2024 agreement as a political interim measure, not a formal Annex C revision, meaning the underlying 1973 treaty structure has not changed. Noted Paraguay loses an estimated US$1.25 billion in annual potential revenue under the current terms. > "Itaipú: el acuerdo Lula-Peña expira en diciembre de 2026 en medio de una incierta renta eléctrica para Paraguay." Source: https://www.abc.com.py/economia/2026/05/14/itaipu-el-acuerdo-lula-pena-expira-en-medio-de-una-incierta-renta-electrica/ ### ANDE's own admission that the Operational Agreement expiry forces a structural rethink - **ABC Color** (Paraguay, es) — Reported that ANDE, Paraguay's national electricity utility, publicly admitted that the 2007 Operational Agreement (which grants Paraguay preferential use of Itaipú surplus power, keeping ANDE costs low) also expires December 31, 2026, creating a dual negotiating problem. ANDE officials confirmed a 'new form of negotiation' is required for electricity supply from 2027, distinct from Annex C. > "Itaipú: ANDE admite que el fin del Acuerdo Operativo obliga a una 'nueva forma de negociación' para 2027." Source: https://www.abc.com.py/economia/2026/05/01/itaipu-ande-admite-que-el-fin-del-acuerdo-operativo-obliga-a-una-nueva-forma-de-negociacion/ ### Paraguayan official agency record of the 2024 Peña-Lula tariff agreement described as the reference baseline - **Paraguay Agencia IP** (Paraguay, en) — Official Paraguayan record of the May 2024 agreement with Brazil setting the bridge tariff at US$19.28/kW-month and projecting US$1.25 billion in annual income for Paraguay through 2026. The agreement was the baseline from which 2026 Annex C negotiations departed. > "Paraguay government celebrates historic Itaipú tariff agreement with Brazil generating US$1.25bn annually through 2026." Source: https://www.ip.gov.py/ip/government-celebrates-historic-agreement-with-brazil-generating-an-annual-income-of-us-1-250-billion/ ### unlabelled - **Ultima Hora** (Paraguay, es) — Source: https://www.ultimahora.com/el-tratado-de-itaipu-cumple-53-anos-y-sin-acuerdo-para-anexo-c - **ABC Color** (Paraguay, es) — Source: https://www.abc.com.py/economia/2026/04/23/itaipu-propuesta-al-gobierno-plantea-sextuplicar-compensacion-y-crear-un-holding-con-brasil-y-argentina/ ## Across the graph - Entities: Paraguay --- Canonical: https://rbtfl.xyz/ja/n/paraguay-itaipu-annexc-2026