The government of Paraguay has refused to accept Argentine pesos as payment for the energy created by the Yacyretá Dam, claiming it has no use for the currency.
The dam, which is owned by both Argentina and Paraguay, produces almost 20,000 KW per hour, of which Argentina uses almost 80%. It stands across the Jasyretâ-Apipé waterfalls in the Paraná River that runs between the Argentine province of Corrientes and the Paraguayan city, Ayolas.
“The dam is 50% Paraguayan and 50% Argentine,” said the Director of the Yacyretá Binational Entity (EBY) Enrique Cáceres in a radio interview in Asunción.
Argentina is almost US$60m in debt to Paraguay for use of the dam, which produces 60% of Argentina’s hydroelectricity. Now, the government headed by Federico Franco, is refusing to accept payment from Argentina in pesos, insisting that they pay in American dollars.
“They have the necessary funds in pesos, but we don’t need pesos, we need dollars,” said Cáceres.
The announcement comes at a time of growing controversy between the two governments. The removal of Paraguay from Mercosur came after former president Fernando Lugo’s impeachment on Friday 22nd June. Shortly afterwards Argentina removed its ambassador from the country.
Paraguay has caught the attention of news worldwide with some calling the impeachment a cout d’etat. In a recent trip, the secretary general of the Organization of American States, José Miguel Insulza, said the situation is “calm” but very “delicate” and would need monitoring.
However, Cáceres says they are not looking for any tension between the neighbouring countries.
“Paraguay wants to repair the relationship, not create conflict,” he said.
The 808m dam itself has a murky past. The construction, which started in 1979, drew heavy criticism for displacing almost 40,000 people as well as destroying the nearby habitat of many species that would later become extinct.
In mid-June 2007 a court case against the EBY was filed on behalf of 12,000 misplaced people. Although EBY was found guilty of inaccurate research they did not have to compensate any of the families because the court ruled it was not their land.
The Yacyretá dam was not completed until 1998 and in the end cost more than US$11bn. It is nicknamed “the monument to corruption.”