The project, worth some 1 billion reais ($199.87 million) and expected to be completed by 2026, will upgrade over 800 kilometers of the energy transmission line that connects the Itaipu plant with the key states of Sao Paulo and Parana.

The move to upgrade the line, operated by Eletrobras subsidiary Furnas, is needed as Brazil is increasing its generation of wind and solar power, said Andre Clark, Siemens Energy vice president for Latin America.

Rising solar and wind output poses a dilemma for the power grid due to intermittent generation.

"It's a system that was created historically for a paradigm (of hydroelectric generation) which is changing very quickly," Clark said.

The project will also take measures to protect the highly sensitive infrastructure project from cyber attacks, said Clark.

($1 = 5.0033 reais)

(Reporting by Leticia Fucuchima; Writing by Carolina Pulice; Editing by Leslie Adler)