Energy and sustainability
Green energy in Paraguay: a competitive edge few countries have
· By Rodrigo D. Ruiz-Diaz Perrier
When talking about green energy in Paraguay, it is worth starting with a fact that surprises any European: the country generates 100% of its electricity from renewable sources, almost entirely hydroelectric.
The foundation: Itaipú and Yacyretá
Paraguay co-owns, together with Brazil and Argentina respectively, two of the largest hydroelectric plants in the world. It consumes only a fraction of that energy and exports the rest — mainly to Brazil (78%) and Argentina (22%) — making it one of the largest exporters of renewable energy per capita on the planet, according to REDIEX data.
What is Paraguay's main energy source?
Hydropower, without a doubt. But the country is actively diversifying: a new law now regulates electricity generation from non-hydro renewable sources, opening the door to large-scale solar and wind farms, something that until recently did not exist in a regulated form in the country.
Green hydrogen: the bet on the future
The Ministry of Public Works, with support from the IDB, is developing a National Strategy for the Green Hydrogen Economy, harnessing the enormous surplus of cheap, clean energy to produce hydrogen through electrolysis. Because it relies on electricity that is already renewable and very cheap, Paraguay positions itself as one of the most cost-competitive potential green hydrogen producers in Latin America.
Why this matters for investing in Paraguay
Cheap, 100% clean electricity is, alongside the "Triple 10" tax scheme and the maquila regime, one of the three main arguments repeated in every investment-attraction report. Energy-intensive industries (data centres, crypto-asset mining, aluminium or hydrogen production) find energy costs in Paraguay that are hard to match in Europe.
Concrete opportunities for a European investor
Beyond generation itself, there are opportunities in developing solar projects, engineering and consultancy for the nascent green hydrogen industry, and in associated infrastructure (electrolysers, storage). It is still a young sector in Paraguay, meaning more regulatory risk but also more room for early entry.
Frequently asked questions
Brief answers to help you make an initial decision.
What is Paraguay's main energy source?
Hydropower: the country generates 100% of its electricity from renewable sources, mainly from the Itaipú and Yacyretá plants.
What are green energies?
Sources that generate electricity without carbon emissions; in Paraguay these are hydropower (the current base) and, under development, solar, wind and green hydrogen.