Amid the dispute between the two partners of Itaipu Binacional over the tariff value, Luiz Inácio Lula da Silva's government (PT) threatens to terminate the agreement that obliges Brazil to buy the electric power not consumed by Paraguay.
According to the Itaipu Treaty, each country is entitled to 50% of the energy generated by the hydroelectric plant. However, Paraguay has never reached that quota, still consuming around 17% of the total produced today.
In 1973, Brazil committed to purchasing the surplus from Paraguay to ensure the project's viability.
This commitment is not explicitly stated in the treaty that established the company. However, it is outlined in an attached document, which, according to the government, is subject to revision.
In this moment of disagreement over the tariff value, Brazilian authorities are considering using legal instruments to inform Paraguay of their intention to terminate the agreement.
In that case, Paraguay may resort to an international court. Termination is seen as a drastic measure, on the brink of a diplomatic incident.