U.S. AI Pact Reaches for Paraguay’s Power

On Friday, 23 October 2026, Foreign Minister Rubén Ramírez Lezcano signed Paraguay onto the U.S.-led Pax Silica declaration at the U.S. State Department in Washington. The pact names Paraguay’s hydropower and critical minerals as potential inputs for artificial-intelligence infrastructure, but offers no binding project commitments in return. The Trump administration launched the effort to secure AI and chip supply chains among “trusted partners” and reduce dependence on China.

Power, minerals and promises

The United States and Paraguay said they would use Paraguay’s hydropower and critical minerals for what the State Department called “superintelligence infrastructure in the Americas.” But the declaration lists no projects, deadlines, investments or companies. Its language expresses intent, not binding duties or penalties. For now, the grand infrastructure pitch comes without a project list or a price tag.

After travelling to Washington, President Santiago Peña announced the signing on X and wrote that Paraguay was no longer a consumer of technology but a producer. Peña leads Paraguay’s conservative government and says he’s close to the White House. The Trump administration launched Pax Silica in December 2025. Argentina, Chile, Costa Rica, El Salvador and Panama are also Latin American signatories.

The declaration refers to investment security, “trusted” networks, fibre-optic cables and data centres. It also warns against overcapacity and unfair dumping. Those are the pact’s stated priorities; the text doesn’t specify what Paraguay will supply or what investments the country will receive.

Dams generate most of Paraguay’s electricity. ANDE president Miguel Báez Reyes named the Itaipú, Yacyretá and Acaray plants; Itaipú and Yacyretá are shared with Brazil and Argentina. Paraguay and the United States signed a memorandum in February to deepen cooperation on secure critical-minerals supply, but officials haven’t identified the minerals Paraguay might supply. Peña says the pact will bring more investment and jobs.

A separate contract puts numbers on the deal

While the declaration stays broad, power utility ANDE signed a 15-year contract with Kuntur on Thursday, 22 October. Kuntur is tied to Araico. The agreement covers up to 286 megawatts for an AI data centre at Yguazú, with supply scheduled to begin at 6 megawatts on 1 December 2026, rise to 146 megawatts in April 2028 and reach 286 megawatts in April 2029. The maximum equals the Acaray plant’s capacity plus 66 megawatts. Báez said the contract excludes crypto mining.

The tariff is US$56.39 per megawatt hour at 23 kilovolts and US$48.91 at 220 kilovolts. It will rise annually with U.S. inflation, with a 2.5% floor. Última Hora reported that the deal would let U.S. firm Crusoe Energy build its first Latin American data centre with Araico. Báez wouldn’t explain how Crusoe fits into the arrangement; ABC Color had reported on the related hub, and The Rio Times had covered it as well.

The declaration isn’t a funded project

Peña travelled to Washington from Wednesday, 21 October, to Friday, 23 October. On Thursday, he met Treasury Secretary Scott Bessent, who posted that both sides had reaffirmed work on critical minerals. Peña said U.S. firms were showing growing interest in technology, logistics, manufacturing, trade and mining. His trip followed a visit by Deputy Secretary of State Christopher Landau with a business delegation. Before leaving, Peña also announced a meeting with CIA Director John Ratcliffe, but reports reviewed didn’t confirm that it took place.

Paraguay also belongs to the Shield of the Americas, Washington’s anti-narcotics coalition. Peña describes himself as close to the White House on Israel and Taiwan.

The relationship between Crusoe and Araico remains unclear, as does Brazil’s view of using Itaipú power for the project. The State Department gave no date for the next Pax Silica meeting. Signing the declaration doesn’t itself fund a project or commit Paraguay to a purchase; projects would require separate contracts and approvals. Paraguay ranked 10th of 14 in The Rio Times Latin America Power Index, with 36.0 points in the October 2026 edition. For now, the broad pact offers promises, while the separate utility contract sets out the megawatts and tariffs.