Paraguay to End Discounted Power Contracts for Bitcoin Miners by 2027
TREE NEWS reports: Paraguay’s state-owned utility, ANDE, plans to let all discounted power supply contracts with cryptocurrency miners expire on December 31, 2027, and has stated that this deadline is non-extendable. As of April this year, ANDE had signed power supply agreements with miners, but the utility is now pivoting toward AI projects, having already signed a 15-year power supply agreement with an AI venture.
Background: Paraguay’s Attraction for Miners
Paraguay has been a magnet for Bitcoin miners due to its abundant hydroelectric power from the Itaipu Dam, which provides some of the cheapest electricity in the region. Miners flocked to the country, signing contracts with ANDE that offered preferential rates. However, the government has grown concerned about the strain on the grid and the limited economic benefits—such as job creation—that mining brings compared to other industries.
Implications for the Mining Industry
The decision to end discounted contracts by 2027 signals a significant shift in Paraguay’s energy policy. For miners operating in the country, this means they will need to renegotiate terms at market rates or relocate. The move could accelerate a trend of miners seeking jurisdictions with more favorable energy policies, such as Texas in the United States or parts of the Middle East. It also highlights the growing competition for electricity between crypto mining and other high-demand sectors like artificial intelligence.
The 15-year agreement with an AI project underscores the government’s preference for AI over crypto mining. AI data centers are seen as more aligned with long-term economic development goals, offering higher-value jobs and potentially more stable demand. This mirrors a broader global trend where AI’s insatiable appetite for power is reshaping energy markets and prompting governments to prioritize AI infrastructure over crypto mining.
Forward-Looking Perspective
Paraguay’s move may set a precedent for other countries with subsidized energy regimes. As AI continues to boom, miners could face increasing pressure to compete for power on equal footing. The industry may need to adapt by becoming more energy-efficient or by integrating with AI compute networks. For now, miners in Paraguay have until the end of 2027 to adjust their operations, but the writing is on the wall: the era of cheap, subsidized power for crypto mining in Paraguay is coming to an end.
