The royalties are paid to the National Treasury Secretariat (STN) and distributed by the National Electricity Agency (Aneel), from the application of the legal percentages. The values calculated by Itaipu depend on three variables: the monthly energy production, the dollar adjustment factor and the exchange rate.

Itaipu makes two monthly payments to the STN, the “Principal” and the “adjustment of the Dollar”, subsequently passes them to Aneel, which distributes them in a single parcel to the beneficiaries. Part of the “Principal” values have already been paid in accordance with the new legislation in force, while those relating to the “dollar adjustment” followed the new rule from March 2019.

Most of the payments are made to the 16 neighboring municipalities (15 from Paraná and one from Mato Grosso do Sul). The Union, through the Ministry of the Environment, the Ministry of Mines and Energy and the National Fund for Scientific and Technological development, also receives them. On the Brazilian side the total of 347 municipalities (16 direct and 331 indirectly) receive the financial compensation.

These resources can be applied in areas such as health, education and safety, and its application is prohibited in the payroll of the staff of the benefited municipalities. The royalties of Itaipu began to be paid with the beginning of the commercialization of energy generated by the plant in March 1985 and, in 2018, the total financial transfer to the Brazilian and Paraguayan governments was more than US $498 million.

By completing 50 years, in 2023, Annex C of the Treaty of Itaipu will undergo a review of Itaipu’s financial bases and provision of electricity services, which may also involve the rules of payment of royalties. This is a topic of great relevance for Governments and is being analyzed based on reconciling the interests of both countries through diplomatic dialogue.