The rapprochement between the presidents of the United States, Donald Trump, and the Paraguayan Santiago Peña, this week led to the signing of an agreement between the two countries to establish an artificial intelligence infrastructure company in the South American country, made possible by a long-term energy-supply agreement from the Itaipu Hydroelectric Plant.
According to ABC Color newspaper in coordination with the National Electricity Administration (ANDE), the initial price agreed between the countries will be US$48 per megawatt, an amount that, in principle, covers the costs of the state-run agency. The contract includes an annual 2.5% adjustment in line with United States inflation, as well as a review of the full tariff according to the average generation cost, approximately every two years.
This agreement was announced during a visit to Paraguay by US Deputy Secretary of State Christopher Landau. In addition to American private sector investments, he announced stronger cooperation to secure Paraguay’s airspace and borders and US support for security forces to cut illicit financing, and a future civil nuclear cooperation partnership.
According to the State Department, the Trump and Peña administrations continue to pave the way in a historic partnership that is providing great opportunities for both our countries while contributing to the security and prosperity of the hemisphere.
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The American company Crusoe confirmed on Thursday the strategic partnership with Paraguayan energy and infrastructure developer Araico. The agreement aims to “build high-performance AI computing infrastructure powered by the Itaipu Hydroelectric Plant,” the company said in a statement.
Under the partnership, Crusoe plans to have an initial online deployment by mid-2027, with potential to scale to 106 MW of IT capacity and long-term options to expand to approximately 280 MW in total.
“Located adjacent to the Itaipu substation, the facility will connect directly to one of the largest and most reliable 100% renewable hydropower sources in the world, and will serve both cloud customers in the US and the growing regional demand across Latin America through Crusoe Cloud,” the company said.
“This partnership between Crusoe and Araico directly unlocks new value from our natural resources. It brings jobs, investment, technology and innovation to Paraguay, and gives us a scalable model to create meaningful and lasting changes for the Paraguayan people. This is an opportunity for Paraguay to establish itself as a regional leader in AI infrastructure,” said President Santiago Peña.
Read more: Paraguay ends crisis with Brazil and agrees to discuss Itaipu Annex C
For Landau, who led a U.S. business delegation to Paraguay from the 19th to the 21st, the scope of the agreement and its historic significance were welcomed. “Paraguay’s abundant hydropower creates enormous opportunities for economic growth and jobs, and I am delighted that U.S. capital and know-how will establish Paraguay as a world-class technology powerhouse,” he said. “This project has the potential to be Paraguay’s largest foreign private investment in history and reinforces the strong and lasting ties between our countries,” he added.
Under the terms of the agreement, Araico will lead local development and the infrastructure adjacent to the Itaipu substation, while Crusoe will manage, operate and provide the physical computing for Crusoe Cloud.
Other deals
In addition to the partnership between the two companies in the AI sector, Uranium Energy Corp (UEC) announced a US$12 million investment to develop one of its uranium concessions in Paraguay. The US investment creates jobs in both countries and offers Paraguay a reliable and transparent alternative to predatory financing by strategic rivals.
Landau and the Paraguayan Minister of Foreign Relations also signed an Air Intercept Assistance Agreement to strengthen Paraguay’s capacity to monitor and protect its airspace against flights suspected of narcotrafficking.
The deputy secretary said that the State Department is providing US$5.5 million in assistance to expand support in combating terrorism financing, holding narcoterrorists accountable and operationalizing the new counterterrorism center, in addition to launching projects focused on border security and digital-forensics capabilities.
The United States and Paraguay also announced the start of negotiations for a 123 Agreement for peaceful uses of nuclear energy under the US Atomic Energy Act. Once in force, a 123 Agreement would establish the legal framework necessary for American companies to export significant civilian nuclear equipment and materials to Paraguay under the highest standards of safety, protection and nonproliferation.
