Paraguay is restructuring its electricity sector by creating a new Ministry of Mines and Energy and an independent regulator, while keeping state utility ANDE as market operator but stripping it of regulatory powers — a move designed to attract private investment into generation by establishing clear, stable rules in a hydro-dominated system that needs new capacity.
For decades, ANDE has served as both the dominant operator and the de facto regulator, setting tariffs, imposing sanctions and resolving disputes. That dual role has long been cited by investors as a source of regulatory risk, since the same entity that competes in the market also writes its rules. The reform separates those functions: an autonomous body will assume regulatory authority, while ANDE retains control of transmission, distribution and system operation.
The change comes as Paraguay’s generation mix — almost entirely reliant on the binational Itaipú and Yacyretá hydro plants — faces growing pressure from rising demand and climate-driven hydrological variability. Viceminister Mauricio Bejarano has signalled that the new framework aims to unlock private capital for both conventional hydro and non-conventional renewable projects, diversifying a grid that has seen little new capacity added outside the binational entities.
A dedicated ministry is intended to coordinate policy across ANDE, the binational operators and state fuel company Petropar, replacing a fragmented governance model in which each institution pursued largely independent strategies. For international developers and financiers, the promise of a transparent tariff-setting process and an impartial dispute-resolution mechanism could finally make Paraguay’s abundant hydro resources and emerging solar and wind potential bankable.
Read the full report at The Energy Post.