# Paraguay's state utility will end cheap power contracts for bitcoin miners in 2027 and has signed a 15-year AI deal

Miners pay Paraguay about $350 million a year for electricity at $44 per megawatt-hour, and the utility calls the December 31, 2027 expiry date final.

- Published: 2026-11-14T05:15:42.881Z
- Canonical: https://polylog.news/2026-11-14/paraguay-s-state-utility-will-end-cheap-power-contracts-for
- Publisher: Polylog (Global desk)
- Section: crypto
- Sources: [CoinDesk](https://www.coindesk.com/tech/2026/11/13/bitcoin-miners-pay-paraguay-usd350-million-a-year-but-ai-is-pushing-them-out), [OilPrice](https://oilprice.com/Energy/Energy-General/Will-the-Senates-BAAJA-Bill-Let-AI-Giants-Outmuscle-Utilities.html), [Magica](https://magica.com/news/crusoe-araico-paraguay-ai-cloud-itaipu-power)

Paraguay's state utility, the National Electricity Administration (ANDE), sells power to about 4% of the world's bitcoin mining under contracts priced at [$44 a megawatt-hour](https://www.coindesk.com/tech/2026/11/13/bitcoin-miners-pay-paraguay-usd350-million-a-year-but-ai-is-pushing-them-out). Those contracts expire on December 31, 2027. CoinDesk reported that ANDE calls the date final and has just signed a 15-year deal to power an AI campus backed by Founders Fund. Miners pay the country about $350 million a year.

AI companies are offering longer contracts. Crusoe, a former bitcoin miner that now builds AI infrastructure, is working with the Paraguayan developer Araico on a Latin American AI cloud powered by [the Itaipu hydroelectric dam](https://magica.com/news/crusoe-araico-paraguay-ai-cloud-itaipu-power), with a launch planned for mid-2027. Mining firms already in the country, including Penguin Group, are [shifting their Paraguayan operations toward AI computing](https://hashrateindex.com/blog/the-state-of-bitcoin-mining-in-paraguay-2026-2/).

The same competition is under way in the US. The Senate approved a preliminary version of the Bipartisan Affordability and Jobs Act, and OilPrice argued that it could let [AI companies outmuscle traditional utilities](https://oilprice.com/Energy/Energy-General/Will-the-Senates-BAAJA-Bill-Let-AI-Giants-Outmuscle-Utilities.html) for generation and grid access. In both countries, buyers of computing power are using long contracts and political support to secure cheap firm electricity ahead of other industrial users.

For miners, the issue is margins. Bitcoin below $70,000 and rising difficulty already squeeze their revenue. Losing $44 power at the end of 2027 would force them to move to Ethiopia, Central Asia or the Gulf, or to switch to AI hosting themselves.

## What this means

Electricity is moving to the buyer who will sign the longest contract at a fixed price. AI campuses offer 15 years, bitcoin miners usually commit for shorter periods, so utilities prefer AI. Paraguayan miners, listed mining companies with Latin American sites, and Paraguay's state budget are exposed, because the country earns hard currency from both groups. Hyperscale AI developers gain cheap renewable power. The market has priced the bitcoin halving but not the loss of cheap hosting sites. When China banned mining in 2021, the hash rate moved to the US and Kazakhstan within months, so the network adjusts quickly while individual operators lose money. The likelier outcome over the next year is that miners in Paraguay sign AI conversion deals or announce moves before the contracts end, while Paraguay's share of global mining falls. This depends on ANDE keeping the expiry date. It would be wrong if ANDE offers a new tariff for miners that can run alongside AI, which would show the utility values the revenue more than the long contracts.

## What to watch

- Watch announcements by miners in Paraguay of AI hosting contracts or relocations. They will show how fast the change happens ahead of the deadline.
- Watch whether Paraguay's Congress pushes ANDE to extend miner contracts. A political extension would show the industry's local lobbying power.
- Watch the final Senate and House text of the Bipartisan Affordability and Jobs Act. Its grid-access rules will decide whether AI buyers in the US gain the same priority they are gaining in Paraguay.