The Singaporean-based company, Commons Foundation has signed a deal with Paraguay, a South American country to receive 100 Megawatts of electricity for bitcoin mining.
The announcement went out today after the deal had been signed about a week ago. The deal is arranged to span for ten years throughout which the foundation will buy enough energy capable of boosting its crypto mining processes. Paraguay plans to use this partnership to attract more crypto miners to its grid.
Not only will the 100MW deal supply a decade of electricity to Commons Foundation, but it will also create job opportunities in Paraguay. At least, up to 1000 jobs are envisaged to arise in the next four years in Villa Hayes located in the Jose Falcon district in central Paraguay.
Affordable Hydropower Energy For Crypto Mining
Paraguay is one of the very few Latin American countries that have maintained a public monopoly on electricity. A large percentage of its electricity comes from dams found in Paraguay like the Itaipu dam, Yacyretá Dam, and Corpus Christi.
It is safe to say almost 100% of its energy is hydropower. The South American country is known as the world’s largest net exporter of electricity as 90% of the generated power is exported.
The cost of purchasing a single kilowatt of hydroelectric power is about 5 cents. Amongst these three, the Itaipu dam supplies most of the electricity in terms of the average annual energy production. Based on the Itaipu Treaty signed by the Brazilian government and Paraguay, most of the dam’s supplies are exported to Brazil.
Although Paraguay is ladened with enough electricity supply and is seeking for miners to utilize the surplus, the country will only permit authorized miners on its grid. This is to ensure that it is in line with the Senate bill which was recently passed to regulate the use and activities of crypto mining/trading in the country.
The agreement has no fixed price due to the fact that at every point it would be determined by the prevailing market conditions even though miners would prefer a fixed price. Paraguay is actively looking to secure a spot in the crypto ecosystem and has since pushed for regulation and adoption of digital assets.
Almost at the end of the first half of the year, the landlocked country received approval on its crypto bill.