The European Investment Bank ( via its development arm EIB Global ), the Inter-American Development Bank ( IDB ), and the European Commission have approved a co‑financing package to modernize and reinforce Paraguay’s electricity transmission system.  

The operation will support the construction of the new 500/220-kilovolt Emboscada substation and associated transmission lines. This investment aims to strengthen the interconnected national system, improve supply security for the metropolitan and central systems, and create the backbone for further renewable energy and interconnection projects. 

Under the operation, EIB Global and IDB will provide up to US$70 million in financing, complemented by an EU investment grant of up to €10 million through the Latin America and Caribbean Investment Facility ( Lacif ). The investment is in line with the EU Global Gateway Investment Agenda and supports Paraguay’s long‑term energy strategy. 

The project includes the construction of the Emboscada substation and its connection to the 220kV network supplying Paraguay’s metropolitan and central systems, which together account for more than two‑thirds of the national electricity consumption. This large‑scale investment will increase the capacity, reliability, and efficiency of Paraguay’s electricity system, reducing the risk of blackouts and improving service quality for households, businesses, and industries. 

Once operational, the project is expected to benefit approximately 2.67 million residents, or around 764,000 families. By 2030, the system will meet additional electricity demand and reinforce the reliability of the power supply in Paraguay’s rapidly growing metropolitan area. 

Long-standing partnership

The operation will also strengthen the role of Administración Nacional de Electricidad ( Ande ), Paraguay’s vertically integrated public utility and the promoter, borrower, and final beneficiary of the loan. The Republic of Paraguay will act as guarantor. 

The project is being co‑financed under the long‑standing partnership between the EIB and IDB. In line with the renewed memorandum of understanding between the two institutions and the procedural framework for mutual reliance, IDB will act as lead financier, with the EIB delegating procurement to IDB. This approach streamlines project preparation and implementation, reducing the administrative burden for the promoter while ensuring full alignment with international best practice. 

The non‑reimbursable EU funding blended with the EIB and IDB loans will support Ande in aligning environmental and social procedures with EU standards and modernizing service management through digitalization, thereby improving long‑term institutional capacity and service quality for clients. 

“This project is a flagship example of the EU Global Gateway strategy in action, and demonstrates the European Investment Bank’s strong commitment to supporting Paraguay’s energy transition. By upgrading the country’s electricity transmission network, we are strengthening energy security, enabling greater integration of renewable energy and helping to build the foundations of a modern, resilient and sustainable power system,” says EIB vice-president Ioannis Tsakiris. 

IDB president Ilan Goldfajn adds: “This partnership reflects how multilateral development banks can work as a system. The IDB connects countries in Latin America and the Caribbean with global partners such as EIB Global and the European Union to support investments like this one that strengthen Paraguay’s electricity system and help deliver reliable energy for households and businesses.”