The Nikkei Business Daily has reported that Paraguay’s power utility, Administracion Nacional de Electricidad (ANDE), will build the Yugazu hydro power plant with a capacity of 200MW, using JBIC funds. Paraguay’s government will supplement the JBIC loan with approximately US$40M for the project.

The project, on the Yguaz├║ river in the department of Alto Parana, would consist of two 100MW turbines that will only operate during peak hours. It would be upstream from Paraguay’s only other hydroelectric plant, the 210MW Acaray plant. The project will involve installing additional capacity to an existing dam.

Construction will be from October 2007 to February 2012, at a total cost of US$240M.

JBIC, the Japanese government’s main overseas lender, is providing loans to developing nations to help Japanese companies obtain credits from projects that reduce their overall emissions output. JBIC may be able to secure emission rights of about 100,000 tons a year with the proposed hydro power plant.