Climate-friendly power transmission and supply

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Paraguay has a large supply of electricity generated by hydropower. The existing hydropower plants could in principle cover the country's current electricity needs three times over. However, due to the positive economic development, electricity demand is growing strongly (on average by almost 7.5% p.a.) and Paraguay has a deficit transmission network. The environmentally friendly hydropower electricity cannot therefore be supplied to the consumption centers in the required quantities. Overloaded transmission and distribution lines lead to considerable technical and non-technical losses (up to 35%) as well as regular interruptions and failures in the electricity supply. Due to a lack of line capacity and the resulting high level of supply uncertainty, companies and private individuals currently have to operate diesel emergency generators in parallel and as a reserve. Against this background, the Paraguayan state-owned electricity supplier Administración Nacional De Electricidad (ANDE, borrower and project sponsor) has asked KfW for a development loan to expand the line network, transformers and distribution. The aim of the FC measure is to support Paraguay in maintaining its 100% renewable electricity generation matrix by avoiding the construction of thermal generation plants. This will be achieved by strengthening electricity transmission and distribution systems in western Paraguay in order to expand the use of existing hydropower resources and, in the long term, to integrate other renewable alternatives (especially solar) into the grid. This is intended to improve the transmission capacity and reliability of the electricity supply and to contribute to global environmental and climate protection.