State Department hails an Itaipú-powered AI deal in Paraguay without saying how big it is

By Staff Reporter

WASHINGTON — The State Department ended Deputy Secretary of State Christopher Landau’s three-day visit to Paraguay on Wednesday with a fact sheet calling a new data-center partnership powered by the Itaipú Dam “potentially one of the largest private investments in Paraguay’s history.” The fact sheet does not say how large the investment is, how much power it will use or what it will pay for that power.

The department said Crusoe, a U.S. company that builds computing infrastructure for artificial intelligence, and Araico, a Paraguayan energy and infrastructure developer, had finalized a partnership to build “high-performance” computing infrastructure powered by Itaipú, the hydroelectric dam Paraguay shares with Brazil. Crusoe plans to bring an initial deployment online in mid-2027 to serve U.S. and Latin American cloud customers, the department said.

What Araico has said

Araico has described a much larger plan. In a Sept. 30 interview with ABC Color, Araico executive Alejandro Zuccolillo described a $12 billion campus, “Iguazú AI City,” in Yguazú, in the department of Alto Paraná, needing about 280 megawatts in all. He said a first 6-megawatt stage would be delivered in December, followed by stages of about 130 megawatts in 2028 and 2029. BNamericas has also reported the $12 billion figure.

Zuccolillo told ABC that a supply contract with ANDE, Paraguay’s state power company, was “imminent,” at $45 per megawatt-hour with annual increases. ABC reported that ANDE’s position was that no tariff yet exists for that kind of customer, and that ANDE’s president did not respond to its questions. Zuccolillo said Araico currently falls under the tariff for cryptocurrency mining, which expires in December 2027. The Inquisitor could not find a public announcement that the ANDE contract has been signed, and the State Department’s fact sheet does not mention it.

Brazil and Itaipú

Itaipú Binacional told Brazil’s g1 that the 1973 treaty governing the dam gives each country the right to half the electricity it produces, and that the dam itself does not decide how each country uses its share. “Projects of this nature are not within the plant’s competence,” it said (translated from Portuguese). It added that the U.S. delegation’s visit to the dam was organized by Paraguay on the Paraguayan side, without Brazil’s board members or government. g1 noted that the U.S. announcement did not mention Brazil.

Juan Pablo Segura, the assistant secretary for Western Hemisphere affairs, wrote after the visit that “energy security is economic security,” according to g1’s Portuguese rendering of his post, and that the dam shows Paraguay’s potential as a regional energy hub where U.S. companies can get affordable, reliable power.

The security and nuclear pieces

The fact sheet also lists commitments that are easier to measure:

• An Aerial Intercept Assistance Agreement against suspected drug flights, signed by Landau and Foreign Minister Rubén Ramírez Lezcano. It takes effect only after a later exchange of diplomatic notes.
• $5.5 million in State Department assistance for countering terrorist financing, a new counterterrorism center, border security and digital evidence, and $6.25 million in bilateral security assistance against transnational crime.
• A counterterrorism adviser to be posted in Asunción, which the department called the first such position for its Counterterrorism bureau in the region, and the first office in Asunción of the Bureau of International Narcotics and Law Enforcement Affairs.
• A memorandum of intent to deploy PISCES, the department’s border screening system.
• A $12 million investment by Uranium Energy Corp. to develop one of its uranium concessions in Paraguay.

The two governments also announced the start of negotiations on a civil nuclear cooperation agreement under Section 123 of the Atomic Energy Act. Such agreements are needed before U.S. companies can export significant nuclear equipment and material. Once negotiated, a 123 agreement must be submitted to Congress, which has a review period before it can take effect. Starting talks does not commit either country to a final deal.

Crusoe, asked about the size of its investment, pointed to its announcement of the partnership on Thursday. The announcement gives no dollar figure. It says Crusoe plans to bring an initial deployment online in mid-2027, with a path to 106 megawatts of IT capacity and long-term options to expand to about 280 megawatts in total, at a site next to the Itaipú substation. It quotes Landau as saying the project “has the potential to be the largest private foreign investment in Paraguayan history.”

The Inquisitor emailed the State Department, Crusoe, Uranium Energy Corp., Paraguay’s embassy in Washington and Itaipú Binacional’s Paraguayan press office on Thursday morning with questions, including the size of the Crusoe investment and whether a power contract has been signed. Crusoe responded by pointing to its announcement, described above. The others had not responded by publication time. This story will be updated with any other responses.

Photo: The Itaipú Dam on the Paraná River. International Hydropower Association / Wikimedia Commons, CC BY 2.0.