Paraguay’s power system will be strengthened with a new major investment. The agreement was signed during the annual assembly of the Inter-American Development Bank held in the country. It will finance key infrastructure works designed to improve energy reliability in the metropolitan region.
The funding will support new transmission infrastructure and the construction of a major substation. This substation will reinforce electricity distribution across Asunción and surrounding departments. Authorities say the project will play a crucial role in meeting growing energy demand and improving the resilience of Paraguay’s power system.
US$ 168 million financing package for Paraguay’s power system
The agreement was signed by the National Electricity Administration (ANDE). According to ANDE president Félix Sosa, the project will involve a total investment of US$168 million. This amount will be dedicated to transmission upgrades and new infrastructure. This investment will bolster Paraguay´s power system.
The financing will be co-funded by the Inter-American Development Bank and the European Investment Bank. Each will contribute US$70 million. The project will also receive a US$11.5 million non-reimbursable grant from the Latin America and Caribbean Investment Facility of the European Union.
ANDE will provide a local counterpart contribution of US$16,473,000 to complete the financing structure. According to Sosa, the resources will allow Paraguay to modernise critical sections of its high-voltage transmission system. Particularly, those operating at 500 kV and 220 kV.
New 500 kV substation planned for Emboscada
One of the central components of the project to keep strengthening Paraguay’s power system is the construction of a new 500 kV substation in Emboscada. Authorities consider this infrastructure essential to support the electricity supply in the metropolitan region.
The project will also include the reconfiguration of two existing 500 kV transmission lines. Also, the integration of the new substation into the 220 kV transmission network through the construction of two additional transmission lines.
Energy officials note that these upgrades will significantly improve the capacity and flexibility of Paraguay’s power system. And this will allow the system to respond more efficiently to fluctuations in electricity demand.
Modernisation within ANDE
Beyond strengthening Paraguay’s power system, the project also includes measures aimed at reinforcing ANDE’s institutional capacity. The state utility plans to implement a new integrated information system to modernise its commercial management processes. The programme will also include staff training initiatives and the development of social programmes linked to the energy sector.
The investment forms part of the third phase of a Conditional Credit Line for Investment Projects that supports Paraguay’s broader Sustainable Energy Investment Programme. Authorities say the initiative is designed to ensure that the country’s electricity infrastructure keeps pace with economic growth and rising consumption.
More reliable electricity for over three million people
With Paraguay’s power system strengthened, the project is expected to directly benefit around 3,072,000 residents. Both in Asunción and the departments of Central and Cordillera. According to ANDE, the improvements will provide a more secure, efficient, and responsive electricity supply for households, businesses, and public services in these regions.
Strengthening the transmission network is considered particularly important. Especially, with Paraguay expanding industrial activity and energy demand in its metropolitan areas.
French companies show interest in Paraguay’s power system
During the same event, ANDE representatives also met with a delegation from the Movement of the Enterprises of France (MEDEF). The delegation included representatives from 11 French public and private companies interested in Paraguay’s electricity sector.
According to Sosa, the meeting focused on potential opportunities for investment and cooperation in energy infrastructure projects. The discussions reflect growing international interest in Paraguay’s power system. Which is largely powered by renewable hydroelectric energy and is considered one of the most reliable sources of electricity generation in South America.
