Why is hydroelectricity an important export for Paraguay?

Hydroelectricity is a vital export for Paraguay primarily because the country’s domestic demand consumes only a small fraction of the massive power generated by its major hydroelectric projects, the Itaipú Dam and the Yacyretá project.1

This surplus capacity has transformed Paraguay into one of the world’s largest exporters of electricity. The economic significance of this resource is rooted in the following factors:1

• Strategic Partnerships: Paraguay developed these large-scale facilities through joint treaties with Brazil and Argentina, allowing it to sell excess power to these neighboring markets.1
• Economic Revenue: Following negotiations, such as the 2009 agreement with Brazil, the revenue generated from these energy exports has become a key component of the national economy.1
• Resource Potential: Hydroelectric potential is considered Paraguay’s most important natural resource, serving as a primary export alongside commodities like soybeans and meat products.12

By leveraging its geography along the Paraná River, Paraguay has successfully turned its abundant water resources into a reliable source of national income.1