Paraguay Opens New Route for Private Investment in Renewable Power
Paraguay is putting into operation a new regulatory framework for private investment in solar, wind, biomass and other non-hydroelectric renewable energy, creating opportunities beyond the country’s traditional dependence on large hydroelectric plants.
Paraguay’s Vice Ministry of Mines and Energy has published new implementing rules establishing procedures for licensing private renewable-energy projects under Law 7,599/2025, which modernised the regulatory framework for non-conventional renewable generation.
The measures cover licences for self-generation, cogeneration, commercial generation and electricity exports. They also establish procedures for ANDE, Paraguay’s national electricity utility, to determine reference prices for purchasing electricity produced by private renewable generators and define compensation mechanisms where technical or operational restrictions affect supply.
The framework represents a significant change for an electricity system historically dominated by hydroelectric generation from Itaipú, Yacyretá and Acaray. The government wants private solar, wind, biomass and biogas investment to complement hydropower as domestic electricity demand expands.
For investors, the relevance extends beyond electricity generation itself. Industrial companies may increasingly be able to assess self-generation or cogeneration projects as part of their operating strategy, while specialist developers can explore projects intended to supply the national system or potentially export power.
The government has identified diversification of generation as necessary to strengthen energy security and support future industrial growth. Paraguay’s electricity consumption has been rising rapidly, increasing pressure on generation, transmission and distribution infrastructure.
The new rules do not eliminate project-specific risks. Connection capacity, tariffs, permitting, financing and the commercial relationship with ANDE will remain central to investment decisions. Nevertheless, the establishment of practical licensing and pricing procedures removes part of the regulatory uncertainty that previously limited private participation.
For international renewable-energy developers and energy-intensive industries, Paraguay’s electricity market is therefore beginning to evolve from an almost exclusively hydroelectric system towards a broader private renewable-investment opportunity.
Sources