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surplus of hydroelectricity. “So someone, if smart, is going down to Paraguay to open up an AI facility,” he said.
Indeed, Gabriela Cibils, a partner at global technology and investment firm Cibersons, which is headquartered in Paraguay’s capital Asunción, says she is on a mission to help turn Paraguay into the ‘Silicon Valley of South America’. As BBC News recently reported, she is now leading efforts to build a large and successful sector and attract some of the global tech giants to her home country.
And it’s Paraguay’s abundance of cheap power that is giving it a distinct advantage -thanks to almost100% of generation now coming from hydropower dams such as Itaipu.
As Paraguayan software development entrepreneur Sebastian Ortiz-Chamorro said, if companies want to invest in AI data centres, they should keep in mind that hydroelectric power is “both renewable and steady”. Paraguayan President Santiago Peña has previously
Above: Machacura Dam in Maule, Chile. In 2024 Chile was ranked fourth amongst the top South American countries to add most hydropower capacity
Below: Guarani women in Paraguay. Forty-two years after completion of the Itaipu dam, it is claimed the significant cultural and territorial losses suffered by the Guarani people have still not been effectively addressed. Credit: Julian Peters Photography/
Shutterstock.com
development initiatives of this magnitude. Luiz and Mesquita say communities were displaced, cultural landmarks submerged, and ecosystems altered alongside the substantial economic and energy benefits of the hydroelectric dam. They add that the unequal distribution of the dam’s effects is highlighted by the significant cultural and territorial losses suffered by the Guarani people, which have still not been effectively addressed. Despite ‘persistent concerns’ regarding the social, environmental, and economic impacts of the project, the overall outcome - particularly in terms of energy integration and regional diplomacy - have been largely positive for Brazil and Paraguay, the authors conclude. It has also demonstrated how shared governance can open the door for regional collaboration and promote growth across neighbouring countries. Furthermore, they believe future infrastructure projects should incorporate inclusive governance models, equitable benefit- sharing mechanisms and robust environmental safeguards. Institutional innovation, transparency, and participatory frameworks are essential to ensure that regional cooperation is effective and just. Itaipu provides around 90% of the electricity consumed in Paraguay and 10% in Brazil. Since it started operating in 1984, the plant has generated more than 3.1 billion MWh of hydropower.
Powering Paraguay Back last year, hydropower in Paraguay featured in
discussions between US Senator John Curtis and Secretary of State Marco Rubio, when they spoke about America’s global energy strategy, the growing impact of AI, and a possible role for hydropower. As Rubio believes, AI development is going to put a strain on the amount of energy required to produce AI and AI-driven innovations, offering enormous opportunities for countries that can deliver cost efficient energy in sufficient volume, and enabling them to become leaders in the AI space. The US needs to help invest or partner with countries that have such a supply of energy, he added. Rubio gave the example of Paraguay which has a
16 | April 2026 |
www.waterpowermagazine.com
spoken with companies like Google and OpenAI to encourage them to invest in his country. And in more recent developments, Paraguay’s unused hydropower looks set to be turned into a new revenue stream for the country by powering artificial intelligence development and data centres. Paraguay’s state-owned Administración Nacional de Electricidad has signed a Memorandum of Understanding with Morphware, setting the stage for a government-led Bitcoin mining programme as a national level opportunity. Morphware will act as a technical and advisory partner for regulated Bitcoin mining in Paraguay, which has previously witnessed illegal operations countrywide.
References
Projections of Atmospheric Moisture Transport Over South America in a Changing Climate by Alvaro Avila- Diaz, Paola A. Arias, Roger Rodrigues Torres, Benjamin Quesada, Laís Rosa Oliveira, Alejandro Uribe, Murilo Ruv Lemes, Cristian Felipe Zuluaga, Wilmar L Ceron. International Journal of Climatology, 2025; 0:e70207
https://doi.org/10.1002/joc.70207
Impacts of climate change on the hydropower potential of a multipurpose storage system project in Bolivian Andes by Ivan Alexis Chavez Flores, Santiago Mendoza Paz, Mauricio Florencio Villazon Gomez, Patrick Willems, Anne Gobin. Journal of Hydrology: Regional Studies 62 (2025) 102903.
https://doi.org/10.1016/j.ejrh.2025.102903
Enhancing Latin-American Hydroelectric Plants with Solar and Battery Integration by Luis Eduardo Juanicó and Martin Ducos. (November 01, 2024).
http://dx.doi. org/10.2139/ssrn.5130397
Shared governance as a pathway to regional cooperation and development through the ItaipuCorpus. Júlia Souza Luiz, Marina Rodrigues Mesquita. Dev Policy Rev. 2025;43:e70040.
https://doi.org/10.1111/dpr.70040
Lessons from the ITAIPU Binational Power Plant in South America: A Negotiation Framework for Transboundary Hydropower Governance. Ortigoza, E.; Oxilia, V.; Ríos, R.; Valdez, D.; Riveros, E.; Llamosas, C. Water 2025, 17, 1947.
https://doi.org/10.3390/ w17131947
https://utahpolicy.com/news-release/74464-curtis-rubio- highlight-us-energy-leadership
www.bbc.co.uk/news/articles/c4g92xq8wdlo
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