• World - South America
  • Updated: September 20, 2023

Tensions Escalate Between Argentina, Paraguay Over Yacyretá Dam, Waterway Dispute

Tensions Escalate Between Argentina, Paraguay Over Yacyretá

The longstanding tensions between Argentina and Paraguay have recently reached a boiling point, as Economy Minister and presidential candidate Sergio Massa claimed that Argentina is owed billions of dollars for its contribution to the construction of the Yacyretá Dam.

This dispute has been further exacerbated by disagreements over toll charges on the Paraná River Waterway, leading to a series of retaliatory actions and heated exchanges between the two nations.

Paraguay's acting President, Pedro Alliana, countered Massa's claims, emphasizing that the debt in question is related to the Yacyretá company, a binational hydroelectric venture.

He argued that Argentina's investment in the hydroelectric plant was matched by Paraguay's significant sacrifice, as large portions of its territory were flooded to facilitate the dam's construction.

Paraguay contends that it has not received proper compensation for the flooded territory and that this issue remains unresolved.

In retaliation for the Waterway crisis, Paraguay took the drastic step of cutting off all energy supply to Argentina from Yacyretá.

This move strained Argentina's energy resources and led to further retaliatory actions. Argentine customs authorities impounded 12 Paraguayan lorries carrying liquefied petroleum gas (LPG), further escalating the dispute between the two nations.

Massa also questioned Paraguay's pricing policies, particularly concerning the Itaipu Binational plant, which supplies electricity to both Argentina and Brazil. He said; “I would like to know why we Argentines have to pay more expensive energy than Brazil when buying from Paraguay.

“I also wonder why they do not pay us the millionaire debt they have with Yacyretá. I believe that in general, new governments, when they need to seek legitimacy, start with some fights.”

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