Brazil’s government is not studying any proposals to allow Paraguay to lengthen the repayment of its debt on the binational Itaipu hydroelectric facility, Brazilian Treasury Secretary Arno Augustin said Wednesday.

Speaking at a hearing in congress, Augustin denied the validity of recent statements by Energy Minister Edison Lobao suggesting that Brazil would ease the terms of Paraguay’s debt repayment.

“I’m not aware of any discussions of specific changes in the contract,” Augustin said.

Paraguay has threatened to contest repayment of $4.2 billion in debt on the Itaipu facility in international courts.

Itaipu, which was built with Brazilian and Paraguayan military government capital in the 1970s, is one of the world’s largest and oldest operational hydroelectric power plants, and supplies 90% of Paraguay’s electricity.

Paraguayan President Fernando Lugo made renegotiation of the terms of the Itaupu debt repayment a major part of his platform during an election campaign last year.

Brazilian President Luiz Inacio Lula da Silva is scheduled to discuss Paraguay’s complaints regarding Itaipu at a cabinet meeting Wednesday.

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