On September 19, Decree No. 2.553/24 came into effect, establishing a new energy policy for Paraguay, with a projection to 2050.

The Decree sets out an energy policy plan for Paraguay with a long-term outlook until the year 2050, addressing the need for innovation considering current challenges in the energy sector (the New Energy Policy).

The New Energy Policy aims to consolidate Paraguay's position as a key player in regional energy integration, through overarching goals to strengthen the national electricity sector and key subsectors such as: electricity, binational hydroelectric entities, bioenergy, renewable alternative sources, and hydrocarbons.

These broad goals are divided into specific objectives for each subsector, which will be carried out through action plans. Each specific objective is addressed individually and linked to one or more strategic lines. These strategic lines include essential policy instruments to achieve the objectives of the New Energy Policy, each with concrete targets across three timeframes:

• Short term: 2023-2028
• Medium term: 2029-2035
• Long term: 2036-2050

In total, the action plans include 95 objectives and 385 targets. Below is a summary of the most notable targets of the New Energy Policy for each subsector:

1. General energy sector

  • Institutional strengthening: creation of the Ministry of Energy, Hydrocarbons, and Mining (MEHM) by 2024, followed by a plan to strengthen it and the public companies in the sector by 2025.
  • Energy efficiency: creation of the Paraguayan Energy Efficiency Agency (public-private partnership) by 2030.
  • Carbon bonds: ongoing carbon bond trading plan until 2028.
  • Ecological fiscal systems: incentives for emission reduction and energy credits until 2028.
  • Tariff calculation rules: approval of rules and procedures for calculating tariffs and prices for the final consumer by 2032.

2. Electricity subsector

  • Transparency: public digital platform for tariff structure parameters implemented by 2026.
  • Electrification: projects to electrify areas without access using innovative solutions (grid, mini-grids, individual generation), completed 100% by 2032.
  • Sustainability: program to modernize the vehicle fleet, promoting efficient vehicles (2030) and implementing 70% electric vehicles in the public sector by 2050.
  • Export Nodes: design of infrastructure for export nodes in regional integration, under development by 2028.
  • Renewable infrastructure: solar power plants (2,000 MW), small hydroelectric plants (500 MW), and battery storage systems (5,520 GWh/year) operational by 2040.
  • Energy auctions: national electric power auction program implemented by 2025.
  • Smart metering: 100% coverage of smart meters in urban industrial sectors by 2050.
  • Supply costs: average supply costs (short and long term) formalized by 2027; supply regulations for large consumers implemented by 2025.

3. Binational hydroelectric entities subsector

  • National strategy: implementation of the second National Strategy of the Interinstitutional Binational Hydroelectric Entities Roundtable (MEBI) by 2029.
  • Regional market: energy commercialization from national sources operational by 2027 and signing of the Southern Cone Electric Market Agreement (MECS) by 2030.
  • Paraná Hydroelectric Complex (CHP) (Py-Ar-Br): strategic marketing plan revised and implemented by 2040.

4. Bioenergy subsector

  • Biomass: new legal framework enacted by 2026.
  • Biofuels:
    • Bioethanol blends with gasoline (<=90, 95, 97 octane) by 2050.
    • Biodiesel blends with diesel (20% by 2040, maintained until 2050).
    • Promotion of biofuels in public and cargo transport (20% by 2040, maintained until 2050).
    • Use of synthetic diesel in private vehicles (20% by 2050).
    • Renewal of the public fleet with flex-fuel vehicles by 2050.
  • Forestry programs: 160,000 hectares planted for solid biomass by 2028.
  • Biogas:
    • Pilot plan for electricity generation from biogas (MSW and other biomass) by 2035.
    • Credits and incentives based on surface area implemented by 2025.

5. Renewable alternative sources subsector

  • Connection and supply: approval of regulations for connection and supply between cogenerators, self-generators, or renewable energy producers and ANDE or a distribution concessionaire by 2025.
  • Innovative projects: solar collectors in all public hospitals in the country by 2045, and promotion of hydrogen use in public and cargo transport by 2030.
  • Green hydrogen: technical regulation on safety for the production, transportation, storage, commercialization, and use of hydrogen to be published in 2025.
  • Partnerships: projects with private engagement using alternative renewable sources, totaling 200 MW, for either isolated systems or the National Interconnected System to be implemented by 2040.

6. Hydrocarbons subsector

  • New hydrocarbons law: approval expected by 2025.
  • Hydrocarbon interest areas: bidding for the allocation of hydrocarbon interest areas by 2026.
  • Gas pipelines: feasibility study completed by 2026, and permanent natural gas production commenced by 2032.
  • Research projects: at least five research projects on exploration, production, refining, and distribution of hydrocarbons executed by 2027.