Paraguay Ends Miner Power Deals: 944 MW at Risk

Paraguay's state power company, ANDE, intends to let every special electricity contract held by cryptocurrency miners run out after Dec. 31 next year, according to bloomingbit, and it has no plan to move that date. The arrangement being retired covers about 944 megawatts of contracted power as of April — roughly 13% of the Itaipu generating capacity that is allocated to Paraguay.

The mechanism miners relied on was straightforward: surplus output from the 14,000-megawatt Itaipu Dam, shared with Brazil, was sold under preferential terms at $44 per megawatt-hour, which works out to less than 5 cents per kilowatt-hour. Because electricity is the single largest cost line in Bitcoin mining, a rate that low is what made the country attractive. According to bloomingbit, ANDE expects to collect $350 million from mining-company electricity sales this year. Hashrate Index data cited in the report put Paraguay at about 4% of worldwide Bitcoin mining computing power in the second quarter.

Once those contracts lapse, operators cannot assume the same tariff carries over. Whether they stay and pay whatever standard terms emerge, shift load to other jurisdictions, or idle older machines becomes an individual margin calculation, and ASIC economics are unusually sensitive to power pricing — a few cents per kilowatt-hour can separate a profitable fleet from a stranded one. The report also notes that Paraguay's subtropical heat already imposes cooling costs on companies that relocated there, which makes the loss of a cheap rate harder to absorb.

The policy shift is being driven by two pressures the source identifies. First, domestic consumption is climbing: Itaipu supplied about 88% of Paraguay's electricity last year, and ANDE projects national power demand rising about 8% a year through next year and about 5% annually thereafter. Second, competition for electricity from the AI industry is intensifying, which the report frames as a factor that stands to push miners' costs higher. In other words, the surplus that made the special deals possible is being absorbed by domestic users and other buyers, so the concession has less room to exist.

For context, the source presents Paraguay as having risen to the status of the world's fourth-largest Bitcoin mining hub specifically on the back of cheap hydropower, with overseas companies drawn in by the dam's spare capacity. That framing matters: the country's position in global hashrate was built on a price advantage that is now scheduled to disappear, not on any change in mining difficulty or hardware efficiency.

What to watch next is verifiable rather than speculative. The first checkpoint is whether ANDE holds to the Dec. 31 deadline next year or grants any extension, since the report states the authorities do not intend to alter it. The second is the trajectory of Paraguay's share of global mining computing power after the contracts expire — Hashrate Index publishes quarterly figures, and the second-quarter reading of about 4% provides a baseline to compare against. A third is whether the $350 million in expected mining-related electricity revenue for this year shows up as projected in ANDE's disclosures. Operators with exposure should also track their own all-in power cost against standard tariffs once preferential terms end, because that number, not the headline date, determines whether hardware stays plugged in.