Cars drive through a darkened Paulista Ave in Sao Paulo during the blackout yesterday. Photo / AP

Cars drive through a darkened Paulista Ave in Sao Paulo during the blackout yesterday. Photo / AP

RIO DE JANEIRO - A massive power failure blacked out Brazil's two largest cities and other parts of Latin America's biggest nation for more than two hours yesterday, leaving millions of people in the dark.

All of neighbouring Paraguay also lost power - but for only about 20 minutes - after a huge hydro-electric dam suddenly went offline.

The huge Itaipu dam straddling the two nations' border stopped producing 17,000MW of power, resulting in outages in Rio de Janeiro, Sao Paulo and at least several other big Brazilian cities, Brazilian Mines and Energy Minister Edison Lobao said.

Outages hit nine of the 27 states in a country of more than 190 million people.

The cause of the failure had not been determined, but Lobao said strong storms uprooted trees near the Itaipu dam just before it went offline and could be to blame.

The lights in Rio's Copacabana neighbourhood flashed back to life at 12.37am, prompting cheers and thunderous car honking.

"It's sad to see such a beautiful city with such a precarious infrastructure," said a law student. "This shouldn't happen in a city that is going to host the Olympic Games."

Lobao said the hydro plant at the dam itself was working, but there were problems with the power lines that carry electricity across Brazil.

Brazil uses almost all of the energy produced by the dam, and Paraguay consumes the rest.

In Paraguay, the national energy agency blamed the blackout on a short-circuit at an electrical station near Sao Paulo, saying that failure shut down the entire power grid supplied by Itaipu. All of Paraguay went dark for about 20 minutes.

The company in charge of the dam, Itaipu Binacional, said the blackout did not start at the hydro-electric complex. It said the most likely cause was a failure at one or more points in the transmission system.

The blackouts came three days after CBS's 60 Minutes reported that several past Brazilian power outages were caused by hackers. Brazilian officials had played down the report before the latest outages, and Lobao did not mention it.

Brazil's official Agencia Brasil news agency said yesterday's outage started about 10.20pm local time, snarling streets in Rio, where traffic that is normally chaotic turned riotous.