Paraguay's National Power Administration (ANDE) has announced a 14% increase in electricity tariffs for Bitcoin and cryptocurrency mining operations, a decision that has sent shockwaves through the industry. The rate hike, formalized in Resolution 49238 on June 26, applies to high-consumption groups including crypto mining, blockchain, token projects, and data centers, threatening the viability of these activities in the country.
Tariff Details and Industry Backlash
The new rates apply uniformly to all high-power consumers, adding a 14% surcharge. Mining firms had been drawn to Paraguay by its cheap hydroelectric power from the Itaipu Dam, but the sudden increase erodes profit margins. Andy Jasmin, vice president of the Paraguayan Chamber of Digital Asset Miners, said the decision was made without prior consultation, severely damaging business confidence.
Political Criticism: Government Contradictions Hurt Investment
Senator Salyn Buzarquis condemned the measure, stating it reveals internal contradictions in the Paraguayan government. “What message does this send? ‘You are not welcome, go somewhere else!’ It is killing the business before the great wave of investments has even begun.” He noted that mining companies have already invested massive capital in Paraguay, and changing the tariff structure violates earlier promises of stable electricity costs.
Withdrawal of a $400 Million Investment
According to Jasmin, an unnamed company has decided to withdraw its $400 million investment plan. The firm had committed to building a large-scale Bitcoin mining facility based on ANDE's pledge to keep electricity prices stable until at least 2028. The sudden tariff hike made the project's economics unworkable. Jasmin argued that investors now see Paraguay as a country “with no legal security, contracts not respected, no investment security.”
Uncertain Future: Miners Face Existential Threat
Before the rate hike, Paraguay was one of Latin America's top destinations for Bitcoin miners due to cheap surplus hydropower. But the ANDE decision may force smaller miners to halt operations, while larger players could relocate to Argentina, Brazil, or regions with more stable power costs. Industry observers warn that without a policy reversal or exemptions, Paraguay risks losing the economic opportunity from the global Bitcoin mining wave. Mining associations are in urgent talks with ANDE and congress, but no resolution has emerged yet.