Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Paraguay’s public procurements have historically involved widespread corruption, although the government is making efforts to enhance transparency and accountability. U.S. firms participating in government tenders are strongly urged to contact the embassy’s Economic and Commercial Section, and submit an advocacy questionnaire through the Advocacy Center in Washington, D.C. once the decision to participate has been made. Embassy advocacy in government tenders in the past has helped ensure a more transparent process.
Paraguay’s National Directorate for Public Contracts (DNCP), at https://www.contrataciones.gov.py/, which manages all public procurement tenders, launched a web-based system to increase transparency. DNCP’s website provides information on upcoming solicitations for potential contractors to more easily follow the status of competitions and prepare bids prior to the closing date. Paraguay’s Public Contracting Law stipulates that all public contracting at the national and local levels with a value in excess of approximately $6,000 must be done via DNCP. Foreign firms can bid on tenders deemed “international” and on “national” tenders through the foreign firms’ local legal agents or representatives. Paraguayan law gives preference to locally produced goods in public procurements open to foreign suppliers, even if the domestic good is up to 20 percent more expensive than the imported good.
In October 2013 the Paraguayan Congress passed a law to promote Public-Private Partnerships (PPPs) in public infrastructure and allow for private sector entities to participate in the provision of basic services such as water and sanitation. Implementing regulations for the PPP law were signed in March 2014. As a result, the Executive Branch can now enter into agreements directly with the private sector without the need for Congressional approval. Paraguay’s Ministry of Public Works launched its first PPP in 2019, an expansion of a main highway between Asuncion and Ciudad del Este. Several roads, a dredging project for the Paraguay River, wastewater treatment project in Ciudad del Este, and a medical storage facility for the Social Security Institute are under evaluation.
Paraguay is not a signatory to the WTO Agreement on Government Procurement. It has observer status in the GPA Committee.
U.S. companies bidding on government tenders may also qualify for U.S. government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy Center on foreign government contracts.
Financing of Projects
Both import and export financing are limited. Local banks provide revolving credit for up to 360 days, which may be renewable. High nominal and real interest rates (generating high spreads in both dollars and local currency) present a major obstacle to medium and long-term financing.
Local commercial banks provide exporters direct financing, pre-financing of exports backed by a letter of credit, and discounting of letters of credit upon shipment of the merchandise. Local insurance companies offer importers and exporters a full range of services covering trade activities.
Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks (PDF). The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank. Learn more by contacting the Advocacy Liaison for World Bank or the Advocacy Liaison Website for Inter-American Development Bank (IDB)
The World Bank, the Inter-American Development Bank (IDB), and the Andean Development Bank (CAF) provide project financing for basic infrastructure projects, water systems, and roads. The U.S. Development Finance Corporation (DFC) provides and facilitates the financing of private development projects. The U.S. Export-Import Bank (EX-IM) can finance sales of U.S. exports to Paraguay.