Itaipu: TCU minister wants plan to review treaty – 09/27/2023 – Panel SA

Minister Jorge Oliveira, from the TCU (Federal Audit Court), wants the government to create, within 60 days, an action plan to review Annex C of the treaty between Brazil and Paraguay for the construction of the Itaipu binational plant, on the Paraná River.

The annex in question provides the financial and service provision bases. In the agreement signed in 1973, a review of this part of the treaty was scheduled for when the debt assumed for construction was paid off — and this happened in February of this year.

The process at the Court of Auditors follows a working group from the Ministry of Mines and Energy, created to support the process of reviewing Annex C. Monitoring was determined in another TCU process, an audit closed in 2019.

The process is confidential and would be analyzed this Wednesday (27) in the plenary, but was withdrawn at the request of the rapporteur.

The plan to be prepared by the Ministries of Mines and Energy and Foreign Affairs must include a proposal for criteria for social and infrastructure investments that will be made by Itaipu and also a negotiation strategy for the use of energy in a volume above that contracted.

The minister of the Court of Auditors wrote, according to a report to which the Sheet had access, that between August 2021 and January 2023, Brazil did not receive all the contracted energy. In the same period, Paraguay would have been supplied “above its contract, without any compensation”.

According to the rapporteur, the process instruction mentions that it is up to the plant to define the generation cost and that it has been “burdening it with increased socio-environmental investments, of a political nature, which include the construction of roads, schools and police stations.”

Report from Sheet showed that the cost of these projects is almost R$1 billion and the matter led to a request for an investigation to the Federal Public Ministry.

“As Brazil is paying more for the energy that pays for ‘socio-environmental’ investments in Brazil and Paraguay, in practice, the Brazilian energy consumer is paying for investments in Paraguay”, wrote Jorge Oliveira, from TCU.

In the proposals of his report, he also included a determination for the Ministry of Mines and Energy, which must calculate, together with ENBPar (Empresa Brasileira de Participações em Energia Nuclear e Binacional), the total amount of energy not supplied.

Itaipu Binacional says that it is not “the company’s responsibility to comment on the review of annex C of the Itaipu Treaty, conducted by the ministries of Foreign Affairs of Brazil and Paraguay.” The Ministries of Mines and Energy and Foreign Affairs did not respond.

With Diego Felix

LINK PRESENT: Did you like this text? Subscribers can access five free accesses from any link per day. Just click the blue F below.