Brazil–Paraguay relations are foreign relations

Diplomacy

Diplomacy is the art and practice of conducting negotiations between representatives of groups or states...

 between Brazil

Brazil

Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

 and Paraguay

Paraguay

Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

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Brazil–Paraguay relations have improved greatly after Brazilian President

President of Brazil

The president of Brazil is both the head of state and head of government of the Federative Republic of Brazil. The president leads the executive branch of the federal government and is the commander-in-chief of the Brazilian Armed Forces...

 Lula's decision in 2009 to triple its payments to Paraguay for energy from a massive hydro-electric dam

Hydroelectricity

Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...

 on their border, ending a long-running dispute. Under the accord, Brazil will pay Paraguay $360m a year for energy from the jointly-operated Itaipu plant. Brazilian President Luiz Inacio Lula da Silva

Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva , known popularly as Lula, served as the 35th President of Brazil from 2003 to 2010.A founding member of the Workers' Party , he ran for President three times unsuccessfully, first in the 1989 election. Lula achieved victory in the 2002 election, and was inaugurated as...

 called it a "historic agreement" and the deal slated as a political victory for Paraguayan President Fernando Lugo

Fernando Lugo

Fernando Armindo Lugo Méndez is the current President of Paraguay and a former Roman Catholic bishop of the Diocese of San Pedro.-Early life:...

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