Review of Annex C and maintenance of royalty payments. Definition of the energy tariff and its relationship with the value of the electricity bill and investments. Expansion of the area of operation and longevity of the plant. These are key topics on the agenda of Itaipu Binacional addressed by the Brazilian general director, Enio Verri, in an exclusive interview for Radio Club FM 100,9 e H2FOZ, live, this Tuesday 23rd.
Watch the full interview:
Economist, university professor and federal deputy – an elected position he resigned from to take on the new role in March 2023 – Enio Verri took stock of his first year in office, including the progress of future projects and actions. He also emphasized the alignment of the institutional mission of the plant, located in Foz do Iguaçu, with the guidelines of the federal government, with an emphasis on social and environmental areas.
The turning point, he said, is the R$1 billion shared by the Itaipu Mais que Energia program, which covers 434 municipalities in Paraná and Mato Grosso do Sul – 399 and 35, respectively. “This R$1 billion is a large package, an umbrella for environmental education, environmental and social policy, and it guarantees the life of the plant,” he summarized.
To justify the decision, Enio Verri explained that the construction of the company impacted the lives of people and neighboring cities, a region of productive and high-value land. Since then, Itaipu Binacional has been responsible for the 54 locations in the West, a geographic area expanded based on a technical study that led to Mais que Energia, the flagship program of his administration.
“Our calculations indicate that the reservoir and, therefore, the plant itself, have a predicted lifespan of 194 years. To this end, I cannot allow the lake to become silted up or become extinct due to pollution,” he explained. “Therefore, Itaipu Mais que Energia is the maintenance of investments in these municipalities and an environmental protection policy so that, in fact, the reservoir can last two centuries,” he pointed out.
According to the director of the binational energy company, the repositioning complies with a 2005 regulation, called the reversal note, which determined that Itaipu, in Brazil and Paraguay, produce quality energy with environmental and social commitment. “This is what we are implementing now, reaching the population of Paraná and Mato Grosso do Sul,” he emphasized.
Annex C and royalties
Enio Verri emphasized the difference between the review of Annex C, scheduled to occur when Itaipu Binacional turns 50, and the current negotiation of the price of the tariff generated, which is annual. The review of the treaty refers only to the financial part, and is being conducted by the senior parties of Brazil and Paraguay, with technical assistance from both sides of the plant.
The agreement, he explained, submitted by the Ministries of Foreign Affairs, needs to be signed by the presidents and approved by the National Congress of both countries. The expectation is that the first talks for the review of Annex C, with the corporate bases around the project for the next 50 years, will begin in May.
Regarding financial compensation to states and municipalities, the leader was categorical. “The issue of whether or not royalties will be eliminated is not on the agenda; that is ‘immovable’, it is not negotiable,” Enio Verri stated during the interview. “What is negotiable – and will be a matter of debate – is whether the amount will be the same or greater. This is a point that needs to be clarified to the bordering states in particular,” he concluded.
He also mentioned other important issues that should guide the negotiations, such as the sale by the neighboring country of its share of the electricity generated but not consumed. “We also have issues, such as subcontracting. Because Paraguay pays the normal rate for part of the energy it consumes, but there is a surplus that is paid a third of the price, sometimes a quarter. We want some justice in this,” Enio stressed.
Energy tariff
The electricity tariff is negotiated every year by the Brazilian and Paraguayan management of Itaipu, starting in August, and must be defined by December to be valid for the following year. According to Enio Verri, it was a simple procedure when there was a construction debt, and it was fixed at US$ 22,60. This changed in February of this year, when the financing for the project was paid off.
The Paraguayan government is demanding that the current tariff level be maintained in order to have money left over, which means more investment in the country. For Brazil, it is time to lower the tariff and, consequently, reduce the price of the input, which would represent social inclusion, development and quality of life. “The conflict is already there. And you can’t say that anyone is wrong,” said the Brazilian director-general.
Another new element: the president of Paraguay, Santiago Peña, has taken charge of the tariff negotiations, which will now be conducted by the presidencies, no longer by the general directors of Itaipu. “I believe we are very close to a solution,” revealed Enio Verri. “I have a meeting with the Minister of Mines and Energy in Brasília this Wednesday, where it seems to me that the data is getting closer. Therefore, it may be, I will repeat, it may be that we will have the new tariff in April or early May,” he anticipated.
More topics
In the interview, he also spoke about the opening of the Public Market in the former Cobal neighborhood in Vila A on Foz do Iguaçu's anniversary, and criticized the model inherited from his predecessors. He addressed the revitalization of JK Avenue, the resumption of construction of the campus of the Federal University for Latin American Integration (UNILA) and investments in recycling units to combine income generation and environmental care.
