The European Investment Bank (EIB), the Inter-American Development Bank (IDB), and the European Commission have announced a significant co-financing initiative to modernize Paraguay’s electricity transmission system. The €225 million operation will focus on building the Emboscada substation and associated transmission lines, strengthening the country’s national electricity grid. This investment aims to improve the reliability, capacity, and efficiency of Paraguay’s electricity system, addressing rising demand and reducing blackout risks, particularly in the metropolitan and central systems that account for two-thirds of national electricity consumption.
The financing package includes up to $70 million each from EIB Global and IDB, alongside a €10 million EU investment grant. This project is part of the EU Global Gateway Investment Agenda and Paraguay’s long-term energy strategy. The initiative will support the construction of key infrastructure, ensuring the security of supply and enabling the integration of renewable energy and future interconnection projects. Once operational, the upgraded network is expected to benefit over 2.6 million people by 2030, providing reliable electricity to approximately 764,000 families.
The project also involves enhancing Paraguay’s public utility, Administración Nacional de Electricidad (ANDE), by improving its operational and management capacity through modern digital tools and ensuring alignment with EU environmental and social standards. ANDE will oversee the project’s implementation, with the Republic of Paraguay acting as the guarantor. This collaboration streamlines procurement processes and ensures adherence to international best practices.
EIB Vice-President Ioannis Tsakiris emphasized the importance of the project in supporting Paraguay’s energy transition and increasing energy security. IDB President Ilan Goldfajn highlighted the multilateral development banks’ role in connecting Latin American countries with global partners to support key infrastructure investments. Paraguay’s President of ANDE, Félix Sosa, underscored that this project will not only reduce the risk of power interruptions but also support the country’s industrialization and expand access to clean, sustainable electricity.
This collaboration reflects the EU’s broader Global Gateway strategy, which focuses on building sustainable infrastructure globally. With this project, over 40% of Paraguay’s population will benefit from improved electricity access and service quality, particularly in remote areas.
