Brazil will propose changes in Itaipú and could end Paraguay's dream of being a Bitcoin mining center
The government Brazilian que to review the energy supply agreement for the Itaipu hydroelectric plant, built through a binational agreement between Brazil and Paraguay, in the region of Foz do Iguaçu. The agreement was signed in 1973 and provides for a review of terms after 50 years.
In the revision to be discussed with Paraguay by September, the Brazilian government highlights that it intends to balance the terms so that they better serve both countries and that means lowering the cost of energy supplied to Brazil.
According to the Minister of Mines and Energy, Alexandre Silveira, meetings have already been scheduled between President Luiz Inácio Lula da Silva (PT) and Paraguayan President Santiago Penã to discuss the matter.
“The goal is to have an agreement that meets the interests of both countries and this happens through a broad debate. The arrival of the Paraguayan president is the demonstration that Brazil is back in conversation with the world”, said the minister.
The Itaipu binational plant is strategic for both Brazil and Paraguay, since with 20 generating units and 14,000 MW of installed capacity, Itaipu supplies 8.7% of the energy consumed in Brazil and 86.4% in Paraguay.
Bitcoin mining in Paraguay
However, plans to revise the Itaipu agreement could put an end to Paraguay's recent dream of being a 'mecca' for mining Bitcoin since the changes may cause an increase in energy prices supplied to miners in the country.
Bitcoin mining in Paraguay started around 2015 with Brazilian miners like businessman Rocelo Lopes, however, over the years, large American and Chinese mining farms landed in the place.
In July of this year, the Canadian Bitfarms announced the establishment of a farm in the regions of Iguazú and Villarrica. The company is one of the most important in the sector, with a hashrate of more than 5 EH/s.
Who also announced expansion to Paraguay was the American Sazmining. The company's farm will be installed near the Itaipu dam. The project roadmap foresees that the farm will start mining in September, and will have a capacity of 5 MW, at least in the first few days.
As disclosed by the company, the cost of energy agreed with the Paraguayan government was US$ 0.047 kW/h , substantially lower than the US$ 0.18 paid in the USA.
Kent Halliburton, president and COO of Sazmining, stated on Nathaniel Whittemore's Bitcoin Builders podcast that many officials and people close to the government are mining Bitcoin in Paraguay and this creates a "friendly environment" for the mining industry since, according to him, in America in the South "relationships" make things go faster or slower.
"Paraguay has the recipe to become the new Texas. The two main reasons for choosing this country were the jurisdictional risk in the United States, which fortunately has diminished, and the price of electricity," he said.
