The secret agreement signed on May 24, 2019 between Paraguay and Brazil regarding Itaipu hydroelectric power station (one of the most powerful in the world) has hit the conservative government of the Paraguayan Mario Abdo Benitez.
The deal became only public by end of July. In less than 24 hours, the foreign minister and some other Paraguayan senior officials were forced to resign after learning that the terms of renegotiation of the Itaipu plant agreement benefit only Brazil. The deal would increase costs for Paraguay by more than USD 200 million.
Paraguay’s Senate rejected on July 29 the agreement and instructed the Executive Branch to handle all negotiations with Brazil related to Itaipu on the basis of transparency.
Brazil’s president came to rescue his ally: Bolsonaro sees Abdo as an ideological ally and knows any future government of Paraguay is unlikely to be as close to his government as the current one. A Liberal Party interim government would take a harder approach to the Itaipu negotiations and many other bilateral and multilateral issues facing the two countries. Brazil announced on August 1st the cancellation of the deal and offers a new negotiation as a way to help Abdo to save face.
The Colorado party members withdrew their support for the impeachment motion that failed. President Abdo has been cautioned by the Paraguayan Parliament not to make the same mistakes and a Bicameral Investigative Congressional Commission has also been created to find out exactly what happened and why.
