Foz do Iguaçu (Paraná), May 17, 2004 (Agência Brasil) - Over the last 30 years the lives of Paraguayans, Argentineans, and residents of the westernmost part of the Brazilian state of Paraná have changed radically. In May, 1974, Brazil and Paraguay, in an unprecedented gesture for the two countries, established the Itaipu Binational Company, which since then has continued to be responsible for administering the world's largest hydroelectric plant, The dream of executing such a project in southern Brazil, at the height of the country's military dictatorship, began to emerge from the drawing boards. 40 thousand men were involved in the construction job, and the tab won't be paid off in full until 2023.

The Itaipu Binational public enterprise considers May 17 its effective inauguration date. Prior to this, however, Brazil and Paraguay had already taken the initial steps to build the plant. The two countries had signed the Itaipu Treaty, with rules for the exploitation of the region's hydric resources, after Brazilian and Paraguayan experts observed that the Paraná River and its many tributaries could produce more than just fish and water in abundance for southern Brazil and the neighboring countries.

The job, when it got underway in 1975, faced a huge challenge: to erect a dam 196 meters long and as tall as a 65-story building in the middle of the Paraná River, the second longest in South America. Over 40 thousand tons of concrete were required for the project, which supplies electricity to Paraguay and a part of Brazil.

The total amount of concrete used in Itaipu would permit the construction of 210 soccer stadiums equivalent to Rio de Janeiro's Maracanã. The iron and steel that went into the project at the time would be enough to build 380 towers the size of the Eiffel Tower in Paris.

In 1984, after 10 years of construction, the hydroelectric plant actually began to produce energy for Brazil. At present the installed capacity amounts to 12.6 million kilowatts (KW), with each of 18 generators producing 700 thousand KW. The Itaipu Binational is responsible for 92% of the electricity consumed in Paraguay and 25% of what is consumed in Brazil.

By the end of 2005, when two new turbines begin to operate, the plant will attain its maximum energy generation capacity. With 20 generators functioning, not even the Three Gorges dam which is being built on the Yangtze River in China will surpass Itaipu in energy production.

The Chinese plant will operate with a reservoir larger than Itaipu's, as well as a larger installed potential. The Chinese goal is for the Three Gorges plant to produce 84 billion KW hours per year. Last year alone, with only 18 turbines functioning, Itaipu managed to generate 89 billion KW hours. Itaipu's record production occurred in 2000, when it generated 93 billion KW hours.

Itaipu's dimensions are staggering in the financial sphere as well. The hydroelectric company's annual revenues are on the order of US$ 2.4 billion. But even with a revenue surplus, the company will not register profits before 2023, when it will finish paying off the debts it has incurred since construction began.

75% of Itaipu's annual revenues is used to repay debt. 14% is paid out in the form of royalties to states and municipalities that contain areas inundated after the construction of the dam. These payments represent a form of financial compensation, and since 1984 US$ 2.4 billion have been transferred to the states and municipalities that were affected.

The company's earnings are split 50/50 between Brazil and Paraguay. The same is true of the quantity of energy produced: equal shares for the two countries. Each one, however, has the right to acquire, at a fair price, any amount of energy not utilized by the other for its own consumption. In recent years Brazil has been buying Paraguay's overage to add to its own energy supply and, at the same time, liquidate its debts to its neighbor.

Translator: David Silberstein