Paraguay’s state power company Ande has been incapable of guaranteeing safe and reliable electricity supply, according to government economic and energy affairs advisor Carlos Balmelli.

Balmelli made the comment during the presentation of plans to revamp the sector in light of the country’s power crisis.

The expansion, opening and modernization of the power sector is more than 20 years overdue, said the official

The lack of an energy policy to establish public and private synergies has led to a lack of investments needed to guarantee supply and has impacted economic development, he added.

“The time has come to transform Ande’s monopolistic model into one that stimulates and permits the participation of private investors.”

The current legal framework – law 966 that created the state utility in 1964 – is “precarious” and does not entertain the possibility of private sector participation, except for law 3009 passed in 2006 that allows generation from independent producers, but only for export.

He said the government will continue to push for passage of a bill in congress that would create a modern power sector regulatory framework. The legislation would create an energy and mines ministry, a regulatory agency, an independent grid operator, and private and/or public-private generation and T&D companies.

Ande’s losses total 32% which represents an annual loss of more than US$40mn. Distribution losses reach 22.5% (14.5% technical, 8% theft) and transmission losses 9.5%.

Balmelli questioned Ande’s ability to come through on its US$1.3bn, 2009-18 investment plan when it has only been able to carry out an average of 44.7% of its annual budget in the last nine years or US$60.6mn/year.

Only 38% of the 2009-18 investment plan is financed, said Balmelli, adding the company could lose IDB financing for phase two of a transmission program due to delays.

In addition, the investment plan was drafted when power demand growth was at 5.4%, while current demand is around 6.9%.

Similar Posts:

Share