Paraguay's President Santiago Peña has categorically dismissed complaints from Bitcoin mining operators regarding recent electricity fee hikes, asserting that the government is not obliged to consult them before adjusting rates. He further claimed that numerous mining companies remain eager to enter the country, contradicting industry warnings of an exodus.
Rate Hike Justified, No Prior Consultation Needed
In a press conference, Peña argued that the up to 14% increase implemented by state power utility ANDE is lawful under existing contracts. “The contract says it can increase if the cost of energy rises,” he stated, emphasizing that no provision forces the government to seek miner approval. While acknowledging the hike will reduce profit margins, Peña downplayed its impact, noting that mining contributes few jobs to the economy.
Mining Association Hits Back: Legal Certainty at Risk
Capamad, the local mining association representing heavyweights like Bitfarms, strongly rejected Peña’s remarks. The group insisted that contracts with ANDE stipulate mutual consent for any changes. It accused the government of “damaging the country’s image and compromising long-awaited investment grade by violating legal certainty.”
Capamad member Penguin Group has already secured a 400 MW site in Brazil, and other operators are reportedly eyeing relocation to neighboring countries. Industry observers warn that Paraguay risks losing its competitive edge as a low-cost mining hub if regulatory uncertainty persists.
Balancing Electricity Demand and Investment
Paraguay has long attracted crypto miners due to its abundant hydropower from the Itaipu Dam and some of the lowest electricity tariffs in the region. However, surging mining activity has strained the grid, prompting ANDE to adjust pricing. Peña framed the policy as part of a broader strategy to build a “technological ecosystem” and transform Paraguay into a tech hub. Critics, however, see the unilateral move as a blow to investor confidence.
The dispute highlights the tension between affordable energy for miners and grid sustainability. As Paraguay’s government holds firm, the industry’s next moves—whether to stay, migrate, or negotiate—will shape the country’s role in the global Bitcoin mining landscape.