Paraguay turned its surplus hydropower into a record revenue stream for bitcoin miners, with $350 million projected for 2026. But the state utility ANDE’s special contracts expire on December 31, 2027, and the government is already preparing what comes next: cheap electricity that could now power artificial intelligence.
🔑 Key takeaways
- ANDE set December 31, 2027 as the expiry date for special mining contracts priced at $44 per megawatt-hour.
- State revenue tied to mining is projected at $350 million in 2026, up from $295 million in 2025.
- HIVE Digital Technologies is the most exposed operator, with 297 MW of its 385 MW in use sitting on two affected sites.
- The new Kuntur contract provides 146 MW from April 2028, with a ceiling of 286 MW.
- Converting a mining site to AI costs $8 to $15 million per MW, versus $700,000 to $1 million for mining.
A Tariff Reaching Its Expiry Date
ANDE, Paraguay’s national electricity company, has confirmed that all special contracts with bitcoin miners will end on December 31, 2027. Officials described the deadline as “non-extendable.” The contracts, priced at $44 per megawatt-hour, or just under 5 US cents per kilowatt-hour, supply roughly 4% of global mining power.
Mining grew in the subtropical east of the country on surplus hydroelectricity from the Itaipu dam, rated at 14,000 MW on the Brazilian border. Foreign operators secured lucrative contracts, making Paraguay the fourth-largest mining hub worldwide according to Hashrate Index. Power that was once surplus supplied close to 88% of national capacity in 2025. ANDE’s transmission plan projects national demand growth of about 8% a year through 2027, then about 5%.
Electricity was the miners’ largest cost. Iceland and Scandinavia had already become hubs built on cheap power and a favourable climate. Paraguay follows the same model, but with a far heavier dependence on a single dam.
The table below summarises the annual revenue the state collects from these contracts:
| Year | ANDE revenue | Status |
|---|---|---|
| 2024 | about $100M | Estimate |
| 2025 | $295M | Published figure |
| 2026 | $350M | Projection |
In April, ANDE had 944 MW contracted to miners, roughly 13% of the Itaipu share allocated to Paraguay, according to Félix Sosa, then the company’s president, as quoted by ABC Color. Cademot, Zuns, Muiden and W3X alone accounted for 730 MW. BTCWires estimates the capacity exposed to expiry at 30 to 40 EH/s. Miners based in Paraguay represented about 4% of global hashrate in the second quarter.
HIVE Digital Technologies, the Most Exposed Operator
HIVE Digital Technologies, listed on Nasdaq and in Toronto, is the most exposed company. Its annual report for the fiscal year ended March 31 shows that its agreements for 200 MW at Yguazú and 100 MW at Valenzuela run until December 31, 2027. As of April 30, 297 MW of its 385 MW in use, about 77%, sat on those two sites.
“continued operation will depend on the company’s ability to renegotiate this agreement”
HIVE Digital Technologies, annual report for the fiscal year ended March 31
In September, Gabriel Lamas, HIVE’s chief operating officer for Paraguay, requested an extension of at least ten years. He also flagged possible growth of 300 to 1,000 MW within 18 months and a bill of about $140 million to ANDE for the year. HIVE did not confirm that figure or detail its negotiations: “We appreciate this partnership and, out of respect for it, we do not comment on ongoing commercial discussions.” The company described any decision on its fleet as “hypothetical” if the contracts expire.
The previously announced expansion at Yguazú would add 100 MW, bringing the site to 400 MW. The company also finances part of its activity with mining cash flow, including BUZZ HPC, a cloud service based in Asunción. That diversification helps explain why it is pushing for a long extension rather than a simple renewal.
A 700 MW Cap and an Auction That Could Lift Prices
In July, ANDE’s engineers’ union proposed, from January 1, 2028, a common cap of 700 MW for mining, AI and data centres, roughly 10% of installed capacity. An auction would award power to the highest bidder, whether miners or new AI entrants, with a floor of $56 per megawatt-hour on three- to five-year contracts. The $12 increase would offset electricity sold to Brazil.
Spokesperson Ubaldo Fernández called a 2,000 MW load on a grid of about 5,000 MW a “disruptive load.” He said national demand had risen about 50% in three years without a matching increase in economic growth.
On October 21, the engineers asked ANDE president Miguel Báez for a closed tender. Their example assumed bids at $60, which would generate about $98 million in additional annual revenue on 700 MW. According to CoinDesk, HIVE’s bill would rise from $140 million to $178 million at the floor, or $38 million more before a single machine is installed.
| Scenario | Tariff (USD/MWh) | Reading |
|---|---|---|
| Current mining tariff | 44 | Reference for expiring contracts |
| Engineers’ proposed floor | 56 | Auction over three to five years |
| Engineers’ example bid | 60 | About $98M in extra annual revenue |
| Kuntur contract (average) | 48.91 | Indexed to US inflation, at least 2.5% |
| Imperium proposal | 70 | Highest offer cited |
HIVE’s planned 400 MW would alone occupy more than half of that cap. Báez also referred to requests for an additional 6,300 MW, nearly Paraguay’s Itaipu share. Miners already hold 944 MW, which is 240 MW above the proposed cap.
CoinDesk describes expiry and ongoing talks, while BTCWires uses the phrase “without renewal.” The gap comes down to the status of the agreements: in HIVE’s filing, the end of current contracts does not rule out renegotiation.
Kuntur, Araico and the Pivot to AI
On October 22, ANDE signed a 15-year contract with Kuntur, a Paraguayan company linked to Araico, which is financing the planned Iguazú AI City campus, valued at $12 billion. Supply starts at 6 MW on December 1, reaches 146 MW in April 2028, three months after the mining contracts expire, and peaks at 286 MW. Most of the power will be billed at an average of $48.91 per megawatt-hour, indexed annually to US inflation with a minimum increase of 2.5%.
That price sits about $5 above the mining tariff and roughly $7 below the engineers’ floor, far from the $70 proposed by Imperium. On September 30, Araico director Alejandro Zuccolillo had cited $45 and a signing that was “imminent,” so the published rate comes in above that earlier figure. Founders Fund, co-founded by Peter Thiel, anchors Araico, and Crusoe is slated to operate the campus computers.
If the 700 MW cap is adopted and Kuntur’s 146 MW is counted against it, miners could bid on fewer than 560 MW, less than three-fifths of their current position. ANDE, Araico and Zuccolillo did not respond to requests for comment.
Conversion: What AI Actually Requires
Moving from mining to AI is not a matter of swapping out ASICs, which have no use in training models. Sites can monetise their land, substations and grid-connection agreements, but conversion requires cooling, network capacity, financing and customers. CoinShares estimates conversion costs at $8 to $15 million per MW, compared with $700,000 to $1 million for conventional mining infrastructure. A review of more than $100 billion in AI contracts found only 550 MW billed out of more than 4 GW contracted.
Bitfarms signed a definitive agreement to sell its 70 MW Paso Pe site to Sympatheia Power Fund, managed by Singapore-based Hawksburn Capital, for up to $30 million: $9 million upfront, then up to $21 million over ten months against milestones. Toronto-listed shares closed Friday’s session up more than 10%.
“the sale of Paso Pe is the culmination of a series of transactions aimed at fully exiting Latin America and redirecting the company, its management and 100% of its capital toward North American power and infrastructure for HPC and AI”
Ben Gagnon, Chief Executive Officer, Bitfarms
Core Scientific illustrates the gap between mining and AI hosting. In the first quarter, the group impaired $266.5 million of mining equipment and infrastructure, including $151.6 million for machines and $114.9 million for infrastructure. Its mining operations were negative at the gross margin level, unlike its AI hosting business. In the second quarter, colocation generated $136.7 million in revenue, with 437 MW billed by mid-July: $98.8 million in licence fees and $35.1 million in re-billed power costs, the latter offset by equivalent spending and producing no gross margin.
Under CoreWeave agreements, most sites start at $100 per kilowatt per month, with annual increases of 3.5%. CoreWeave finances some construction and grants credits of up to $1.5 million per MW, which can halve the rent. In the Core Scientific example, such a credit would take 30 months to recover. HIVE also signed a $350 million AI agreement, separate from the $350 million a year miners pay ANDE, which required $185 million of hardware investment before most revenue could be generated.
The contracts also carry late-delivery penalties of $20,000 and then $30,000 per day and, in some cases, termination rights. These clauses ultimately determine who captures the value when electricity changes use.
Outlook and Scenarios
In the near term, the December 2027 deadline and the 700 MW cap frame the market. Three scenarios stand out: a partial renegotiation of mining contracts toward a rate near $56, preserving part of the fleet, notably at HIVE; an open auction in which AI outbids mining as offers rise; or a full exit from Paraguayan mining in favour of AI campuses, with high conversion costs for miners.
For investors, the key question is less the price of electricity than the real ability to convert sites into HPC infrastructure. Signed contracts, financing and creditworthy customers determine value. Watch ANDE’s decisions, any tender announcement, and the next quarterly reports from HIVE and Core Scientific.
Sources
Cet article est publié à titre informatif et éducatif. Il ne constitue en aucun cas un conseil en investissement. Faites vos propres recherches (DYOR) avant toute décision.
