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1. Paraguay's crypto power deals have a fixed end date
Paraguay bitcoin mining faces a hard deadline: state utility ANDE says every special electricity contract with crypto miners will expire on December 31, 2027, ending a hydropower arrangement worth roughly $350 million a year. Officials describe the date as final, and on October 22 ANDE signed a 15-year supply deal with an AI data center project.
The decision threatens one of the more unusual partnerships in the global mining industry. For several years, foreign operators have plugged rows of machines into the surplus output of the Itaipu Dam, the 14,000-megawatt hydroelectric plant that Paraguay shares with Brazil along their common border. That arrangement turned a landlocked South American country into the fourth-largest bitcoin mining hub in the world and handed its public utility a steady new source of hard-currency income.
Now the arithmetic behind the deal is changing. Electricity demand inside Paraguay is climbing, artificial intelligence developers are lining up for the same cheap, clean power, and ANDE has made clear it does not intend to extend the miners' terms. What replaces those contracts is being contested by three distinct camps: the miners already on the grid, the utility's own engineers, and a newly contracted AI buyer.
2. Why miners came to Paraguay in the first place
Electricity is the single largest expense in bitcoin mining, which explains why the industry migrates toward the cheapest megawatts it can find. Miners run specialized computers around the clock to secure the Bitcoin network, and they are compensated in newly issued bitcoin plus transaction fees. Because that revenue is set by the network rather than by the miner, the only real lever an operator controls is cost, and power dominates that cost.
Early in the industry's history, operators gravitated to places such as Iceland and the Scandinavian countries, where cold air reduced the need for expensive cooling and geothermal or hydro generation kept prices low. Paraguay offered a different trade-off. Its climate is far warmer, but its electricity has been inexpensive enough that miners could absorb the extra cooling bill and still come out ahead.
The source of that cheap power is Itaipu. Paraguay is entitled to half of the dam's output, far more than the country historically consumed, and the surplus has long been sold to Brazil. Hydroelectric generation supplied close to 88% of Paraguay's electricity in 2025, underscoring how central the dam is to the national grid and why its spare capacity became so attractive to energy-hungry industries.
3. How much power do bitcoin miners use in Paraguay?
As of April, ANDE had roughly 944 megawatts of capacity under contract with crypto miners, equal to about 13% of Paraguay's share of Itaipu. Those figures were disclosed by Félix Sosa, who was serving as ANDE's president at the time.
The load is concentrated among a handful of operators. Four companies, Cademot, Zuns, Muiden and W3X, account for 730 megawatts of the contracted total, leaving the remainder spread across smaller and mid-sized players, including publicly listed miners.
The commercial terms are simple and, from the miners' perspective, generous. Operators pay a flat $44 per megawatt-hour, a rate that is not adjusted annually and works out to less than five cents per kilowatt-hour. That is among the lowest industrial power prices available to large-scale miners anywhere.
The revenue has nonetheless grown quickly for the utility as more capacity has come online. ANDE expects to collect about $350 million from miners in 2026, compared with $295 million in 2025 and roughly $100 million in 2024. Data from Hashrate Index put Paraguay's share of global bitcoin mining power at about 4% in the second quarter, a significant slice for a country of its size.
4. Rising domestic demand changes the equation
Paraguay's own consumption is the first force pushing the miners aside. ANDE's transmission planning documents project electricity demand growing by about 8% a year through 2027, then slowing to roughly 5% a year afterward. Every megawatt claimed by households, factories and businesses at home is a megawatt that cannot be sold to a foreign mining fleet.
For a state utility, that shift matters both politically and financially. Surplus capacity that once had few domestic buyers is becoming scarcer, and the low fixed tariff granted to miners looks less attractive when the same power could be allocated to local growth or sold on better terms. ANDE has called the 2027 deadline 'improrrogable', a Spanish term meaning it cannot be extended.
The pressure is not limited to miners and residents. ANDE president Miguel Báez has said the utility has pending requests for a further 6,300 megawatts of supply, nearly the whole of Paraguay's share of Itaipu. Demand on that scale makes it clear that the country can no longer treat its hydropower as an inexhaustible surplus.
5. HIVE Digital faces the biggest exposure
Among listed companies, HIVE Digital Technologies has the most riding on the outcome. The miner, whose shares trade in New York on Nasdaq and in Toronto, disclosed in its annual report for the fiscal year ended March 31 that both of its Paraguayan power agreements expire on December 31, 2027. One covers 200 megawatts at a site in Yguazú and the other 100 megawatts at Valenzuela.
The company's filing states plainly that keeping those operations running depends on renegotiating its agreement. That caveat carries weight because Paraguay is the core of HIVE's business: as of April 30, about 297 of the 385 megawatts the company had in use, or roughly 77%, were located in the country.
In September, Gabriel Lamas, HIVE's president of operations in Paraguay, said the company was seeking extensions of at least ten years. He described a path to expanding from 300 megawatts to 1,000 megawatts within 18 months and said HIVE expected to pay ANDE about $140 million this year.
HIVE has been more guarded in subsequent statements. The company declined to discuss its negotiations with the utility, with Lamas calling the relationship valuable while saying HIVE would not comment on talks that are still under way. Asked what would happen to its machines if the contracts lapse, HIVE characterized the question as a hypothetical. It did not confirm the $140 million payment figure and noted that it does not report electricity costs on a country-by-country basis.
Instead, HIVE pointed to a planned 100-megawatt expansion at Yguazú that would lift its total Paraguayan footprint to 400 megawatts, well below the 1,000 megawatts Lamas had outlined. The company also uses cash generated by mining to fund BUZZ HPC, its AI cloud computing business based in Asunción, the capital, a sign that HIVE itself sees high-performance computing as part of its future in the country.
6. The engineers' plan: a cap and an auction
A second camp has proposed a very different framework. In July, the Unión de Ingenieros de la ANDE, the association representing the utility's engineers, called for a combined limit of 700 megawatts on data centers, AI facilities and crypto mining starting January 1, 2028. That ceiling would equal about 10% of installed capacity.
Under the engineers' plan, power within that cap would be sold through an auction open to the highest bidders, including new AI customers, under contracts lasting three to five years. Bids would start from a floor of $56 per megawatt-hour. The $12 premium over the current $44 rate is intended to compensate for revenue ANDE would otherwise earn by selling the same electricity to Brazil.
Ubaldo Fernández, a spokesman for the engineers, argued that adding a 2,000-megawatt load to a system of roughly 5,000 megawatts would be disruptive. He said national demand had risen by about 50% over three years without comparable economic growth to show for it, implying that energy-intensive foreign users were absorbing capacity without delivering broad benefits.
On October 21, the engineers formally asked ANDE president Miguel Báez to run a sealed-bid tender. In their illustration, bids clearing at $60 per megawatt-hour on 700 megawatts would generate roughly $98 million a year in additional revenue for the utility.
7. What the auction would mean for miners' costs
For incumbent miners, the proposal would raise both prices and competition. Applying the $56 floor to HIVE's operations would lift its annual electricity bill to approximately $178 million, an increase of about $38 million a year over the figure Lamas cited. The company's planned 400 megawatts on its own would represent more than half of the entire 700-megawatt auction.
HIVE declined to speculate about proposals that have not been adopted, saying only that it supports a transparent regulatory framework.
The broader squeeze is stark. Miners currently hold about 944 megawatts, roughly 240 megawatts more than the engineers' cap for mining and AI combined. If the cap is adopted and newly contracted AI capacity counts against it, the space left for miners would shrink further, potentially below 560 megawatts, less than three-fifths of what they hold today.
8. An AI campus secures its own power contract
The third camp has already won a deal. One day after the engineers sent their letter, Araico Corporation, the backer of a planned $12 billion development called Iguazú AI City, locked in electricity supply. The campus is planned for Yguazú, the same district that hosts HIVE's largest Paraguayan site.
On October 22, ANDE signed a 15-year agreement to provide up to 286 megawatts to Kuntur, a Paraguayan company linked to Araico. Deliveries are scheduled to begin at 6 megawatts on December 1 and climb to 146 megawatts by April 2028, three months after the miners' contracts are due to end.
Most of that power carries an average price of $48.91 per megawatt-hour, rising each year in line with U.S. inflation and by no less than 2.5% annually. Araico director Alejandro Zuccolillo had said in September that the rate would be $45 and that a signing was close.
The final price sits about $5 above what miners pay today and roughly $7 below the floor the engineers proposed for their auction. Araico is anchored by Founders Fund, the venture firm co-founded by Peter Thiel, and the U.S. AI cloud company Crusoe has said it will operate the campus's computing infrastructure. ANDE, Araico and Zuccolillo did not respond to requests for comment on the contract.
9. What happens next for Paraguay bitcoin mining?
The immediate question is whether ANDE adopts the engineers' cap-and-auction framework, keeps negotiating bilaterally with individual operators, or pursues some other approach before the December 31, 2027 expiry. The utility has said the date will not move, which leaves miners roughly two years to secure new terms or plan for relocation.
For the bitcoin mining industry, the case is an early test of a wider trend: cheap, renewable power that once had few buyers is now being courted by AI developers willing to sign long-term contracts with inflation-linked pricing. Utilities weighing those offers against short-term mining deals may increasingly favor the longer commitments.
For HIVE and the other operators that built fleets around Itaipu's surplus, the coming months will determine whether Paraguay remains a cornerstone of their business or becomes a site they must scale back. Kuntur's first 6 megawatts, due to flow on December 1, will offer the earliest concrete sign of how quickly AI demand begins to claim power that miners once had largely to themselves.