It flows about 2,695 kilometres (1,675 mi)[2] from its headwaters in the Brazilian state of Mato Grosso to its confluence with the Paraná River north of Corrientes and Resistencia.

This makes it an important shipping and trade corridor, providing a much-needed link to the Atlantic Ocean for the otherwise landlocked nations of Paraguay and Bolivia.

This has created issues in large cities such as Asunción, where poverty-stricken farmers from the country's interior have populated the river's banks in search of an easier lifestyle.

Seasonal flooding of the river's banks sometimes forces many thousands of displaced residents to seek temporary shelter until the waters recede from their homes.

The Paraguayan military has been forced to dedicate land on one of its reserves in the capital to emergency housing for these displaced citizens.

The Pantanal is the world's largest tropical wetland and is largely dependent upon waters provided by the Paraguay River.

Owing to its importance as a navigable waterway serving Brazil, Argentina, and Paraguay, the river has been the focus of commercial and industrial development.

The final plan is still uncertain, along with the effect it will have on the Pantanal and the ecology of the entire Río de la Plata basin.

The controversy over whether or not the project will have a disastrous effect on the local ecology, as well as the potential economic gains, continues to this day.