Paraguay is quietly enlarging one of South America's big hydroelectric plants, and the project just cleared a milestone. President Santiago Peña inspected the Aña Cuá works on 17 July 2026, where the binational Yacyretá Entity (EBY) reported the expansion at 76% overall progress. It is the kind of infrastructure story that rarely makes international headlines, yet it sits underneath much of what makes Paraguay attractive as a base: abundant, cheap, almost entirely renewable electricity.
What Is Being Built
The Aña Cuá project adds a new powerhouse on a secondary branch of the Paraná river, next to the existing Yacyretá dam that Paraguay shares with Argentina. Three vertical-axis Kaplan turbines will add a combined 270 megawatts of capacity, drawing on an ecological flow of about 1,500 cubic meters per second that already runs down the Aña Cuá branch. Because it uses water that is currently released without generating power, the expansion needs no new flooding.
The numbers are substantial for a country of Paraguay's size: an investment on the order of US$600 million, roughly 1,000 jobs during construction, the first turbine expected online in 2028, and full completion targeted for 2029. Together the units should lift Yacyretá's annual output by around 10%.
Why More Hydropower Matters Here
Paraguay already generates essentially all of its electricity from hydropower, split between Itaipú and Yacyretá, and it produces far more than it consumes. Adding 270 MW of clean capacity deepens an already unusual position: a small economy sitting on a large, low-cost, renewable power surplus.
That surplus is increasingly a magnet. It is part of what draws energy-hungry industry, data-center proposals, and crypto-mining operations to the country, and it reinforces the broader picture of a state that plans for the long term. It sits alongside the second investment-grade credit rating as another sign of an economy building the foundations that outside capital looks for.
What It Means for Expats and Investors
For an individual weighing Paraguay, a hydro expansion is context rather than a personal event, but a telling one. Cheap, reliable, clean power keeps the cost of living and the cost of doing business low, and it underwrites the data-center and industrial investment that a growing economy runs on. If you are looking at the country as a business base, our overview of investing in Paraguay covers the practical routes in.
On tax, the usual precision applies. A new power plant does not change how you are taxed. Paraguay's 0% territorial tax on foreign income turns on genuine tax residency, not on the electricity grid, and US citizens and green-card holders remain taxed by the IRS on their worldwide income regardless of where they live. Take US-qualified advice if that applies to you.
Frequently Asked Questions
How big is the Aña Cuá expansion?
Three Kaplan turbines adding 270 MW of capacity, for an investment of roughly US$600 million. At 76% overall progress as of July 2026, the first unit is expected to start up in 2028 and the whole project to finish in 2029, lifting Yacyretá's annual output by about 10%.
Does the expansion require flooding new land?
No. It uses the ecological flow already released down the Aña Cuá branch, about 1,500 cubic meters per second, to drive the new turbines. That is why it can add capacity without a new reservoir.
Does cheaper power change my taxes in Paraguay?
No. Energy infrastructure has no bearing on Paraguay's territorial tax system, which taxes foreign-source income at 0% in principle and depends on real tax residency. US persons remain taxed by the IRS on worldwide income wherever they live.
Disclaimer: This article is general information, not investment, legal or tax advice. Project figures and timelines change as construction proceeds. Confirm the current status with an official source before acting on it.
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About the author
Yannick Schroth
Founder · Paraguay relocation advisor
Lives in Asunción and guides international nomads, entrepreneurs and investors toward residency, a cédula and a tax-efficient structure in Paraguay.
