The Energy Transition in Paraguay

Paraguay occupies a distinctive position in the global energy transition, landlocked yet energy-rich, politically stable yet underexplored in terms of mineral potential. As one of the world’s few countries to generate nearly 100% of its electricity from renewable sources, primarily hydropower from the Itaipú and Yacyretá dams—Paraguay already operates on a low-emissions energy platform. However, its transition is far from complete. The challenge now lies in electrifying transport and industry, expanding domestic energy use, and positioning itself within regional and global clean energy value chains. While Paraguay is not a major player in critical mineral production, it does hold untapped potential in gold and essential industrial materials like gypsum and pig iron. These resources, though modest, are increasingly relevant as regional supply chains seek diversification and resilience. Paraguay’s integration into Mercosur, the G77, and the Inter-American Development Bank (IADB) provides it with strategic avenues to shape regional energy policy, attract infrastructure investment, and participate in broader South American efforts to align economic development with climate goals. Paraguay’s energy and resource strategy is increasingly shaped by its ability to export clean electricity, develop cross-border green hydrogen corridors, and deepen regional cooperation, all while safeguarding sovereignty over its energy assets and natural environment. As clean energy diplomacy gains traction across Latin America, Paraguay’s renewable strength offers it a quiet but significant geopolitical advantage.