Backing for efforts of Argentina and Paraguay to increase hydroelectric generation in border area

As an example of the efforts of the Andean Development Corporation (CAF) in favor of the sustainable development of the Latin American region, the multilateral organization approved for the Republic of Argentina, a loan for US$210 million at 15 years with a five-year grace period, destined to replace, in the framework of the Yacyretá Binational Hydroelectric Complex Termination Plan, the infrastructure that will be affected by the rise of the reservoir to its final level (83 meters above sea level). The executing agency is Entidad Binacional Yacyretá (EBY). CAF President & CEO Enrique García said that the Yacyretá Termination Plan was part of the priorities identified by the governments of Argentina and Paraguay in the context of the IIRSA initiative.

"With the conclusion of the works included in the Yacyretá Termination Plan, set for 2010, the hydroelectric complex will add about 7,500 additional GWh to the interconnected system of Argentina and Paraguay, increasing the reliability of the electricity systems, strengthening capacity for power generation, transmission and distribution in densely populated areas with important industrial production, as well as reinforcing regional electricity integration and the energy markets," Garcia said.

Yacyretá is a multipurpose binational undertaking (Argentina and Paraguay), whose construction began in 1983 with the main objective of increasing electricity generation. The project will also improve navigability on the Paraná River, controlling the periodic rises, improve irrigation infrastructure on both river banks and rehabilitate the communication routes between both countries.

In November 2004, considering the urgent need to increase the country’s electricity generating capacity to meet stronger demand and improve the reliability of the system, the Argentine government gave priority to increasing the supply of gas and electricity generation, which are the main components of the national energy matrix. As a result, it began to implement the National Energy Plan 2004-2008, which assigns priority to the completion of the Yacyretá Complex and the construction of the line connecting transmission line to take out the incremental power.

The Infrastructure Replacement Program, which CAF is financing, will concentrate on the cities of Carmen de Paraná and Encarnación (both in Paraguay) and Posadas (in Argentina), border urban centers whose physical infrastructure will be affected by the higher level of the reservoir. The Program is closely coordinated with an integrated relocation and resettlement program for the affected population estimated at 18,000 families, which is in full execution with promising results. The financing program comprises the construction of a new coastal embankment to protect the cities from wave action, and coastal avenues to improve the landscape and its urban fabric; construction of roads and bridges; relocation of electricity lines; construction of the Encarnación airport and ports. All these works are part of the expansion and development plans for the area.