The presidents of Argentina and Paraguay have signed a memorandum of understanding that grants 90 days for a bi-national commission to study the financial viability of their shared 3,200-MW Yacyreta hydroelectric project on the borderline Parana River.
Business News Americas reported Argentine President Nestor Kirchner and Paraguay President Nicanor Duarte named the commission to focus on possible reduction of US$5 billion in debt.
“Our debt for the construction of the hydro plant would not have been so scandalously huge were it not for the repeated irregularities and complicit silence we are finally in the process of confronting,” Duarte said.
Yacyreta’s debt totals about US$10 billion, largely as a result of additional construction financed by Argentina. Paraguay has indicated it thinks interest was calculated unjustly. Energy analysts said Argentina might be willing to forgive US$5 billion of debt if the current power-sharing structure is maintained, supplying Argentina 98 percent of project power.
Kirchner signed 1.05 billion pesos (US$340 million) in contracts in late June for construction, operation, and maintenance of a third transmission line from Yacyreta, BNamericas said. Iecsa and Litsa of Argentina and Isolux of Spain won bidding for the northern section, while Intesar of Argentina won the southern section.
When complete in 2007, the line is to carry power from a planned expansion of Yacyreta’s capacity.