The Commons Foundation has signed a 100-megawatt, 10-year power purchasing agreement with Paraguay’s grid operator, buying energy that it plans to use for crypto mining.
The South American country’s grid runs almost entirely on hydroelectric power with a price of around 5 cents per kilowatt hour, thanks to dams built on some of the world’s biggest rivers. Most of the electricity from Itaipu dam, the world’s largest in terms of average annual energy production, is exported to Brazil, under a treaty that is set to expire in 2023.
The Paraguay government is looking to attract bitcoin miners to soak up excess energy. Last week, the country’s Senate passed a bill to regulate the industry. The bill requires miners to be licensed by authorities.
The 100 MW secured by the Commons Foundation will create 1,000 jobs over the next four years in Villa Hayes at district Jose Falcon in central Paraguay, according to a press release sent to CoinDesk.
The contract between the Paraguay Electrical Authority (ANDE) and the Commons Foundation is a variable price agreement, meaning that the price of the energy is determined by market conditions. Miners usually prefer fixed-price agreements, which allows them to lock in prices in advance so they are not affected by price fluctuations.
“Our contract today is a historic day for Paraguay. I am confident that this business will succeed and attract more investors,” said ANDE Chairman Félix Sosa in the press release.
The contract was signed on July 15 but announced on Thursday.
The Commons Foundation is a Singapore-based organization that invests in crypto and blockchain projects.
Canadian Bitfarms (BITF) operates a 10 MW mining site in south central Paraguay.
Read more: Paraguayan Senate Passes Bill Regulating Crypto Mining and Trading
