The Itaipu dam: A massive binational collaboration between Paraguay and Brazil

Denise Flauzino, who’s from Rio de Janeiro, was on a tour of the Itaipu hydroelectric dam in southern Brazil for the second time. 

Itaipu, which stretches across the Parana River, is one of the largest hydroelectric plants in the world and provides electricity to 80 million people in Brazil and Paraguay. 

“I think it should be among the Seven Wonders of the World,” Flauzino said. “I think it’s wonderful. Really pretty and sensational engineering.”

In order to build the dam, more than 500 square miles of land had to be flooded, inundating natural wonders and forcing out Indigenous communities. There was resistance at the time, but the dam was pushed through, in part, because it was developed and built during the 1970s and ‘80s — a time when both Brazil and Paraguay were allied politically, with similar military dictatorships.  

They jointly constructed the dam. Today, Itaipu continues to involve energy negotiations between the two countries, which share responsibility for its operations. And while that comes with its own challenges, observers say the dam is still a symbol for a unique cross-border collaboration. 

Local foreign relations history professor Micael Alvino da Silva said that when the dam was being built, Brazilian leaders said Itaipu represented a new model of international cooperation based on mutual respect and participation between the two countries.

Da Silva said it’s the only such binational project of this scale in the Americas.

“From the moment you cross onto Itaipu land, you’re not in Paraguay, nor are you in Brazil,” he explained. “It’s a territory governed by a treaty, and run by the Itaipu Binacional company.”

Itaipu has its own security force. Decisions are made by a governing board appointed in equal numbers by Paraguay and Brazil. The two countries have split everything down the middle: the construction, energy production, output and even the control room.

But this type of joint relationship is not always easy. Over the last year, Brazil and Paraguay held heated discussions over a new operating contract for Itaipu. The tension was over the price of energy produced.

Carlos Henrique Santana, a political scientist at Brazil’s Federal University of Integration, UNILA, in Foz de Iguaçu, explained that Paraguay sells back to Brazil a substantial chunk of its portion of Itaipu energy.

“So, the Paraguayan government wanted to sell back its excess energy to Brazil at a higher rate, in order to use those resources for investments in other areas, while the Brazilians believed the rate should stay lower, according to the previous deal,” he said.

They finally came to an agreement in May, settling closer to Paraguay’s proposal, locking in a price-per-kilowatt hour just above market rate, almost double the operating cost of the energy itself.

Many, including professor Santana, say it wasn’t a good deal. But it was still a deal. And that is the essence of this binational experiment.

Lazo Cardoso, who helped build the dam and worked at the complex for 12 years, said the project has paid off.

“Itaipu is like my child,” he said. “I saw it being born and growing up. Now, she is making art, the most beautiful art, which is the generation of energy — clean and renewable energy.”