April 21 (Bloomberg) -- Former Roman Catholic bishop Fernando Lugo ended more than six decades of rule by Paraguay's Colorado Party in presidential elections, vowing to spread economic growth to the country's poorest people.

Lugo, who heads the Patriotic Alliance for Change, won 40.8 percent of the votes yesterday, compared with 30.7 percent for the Colorado Party's Blanca Ovelar, the Election Court said on its Web site. Former General Lino Oviedo was third with 22 percent. Ovelar's defeat was the Colorado Party's first in its 61 years in power, the longest of any ruling party in the world.

``We have written a new page in the country's history,'' Lugo, 56, said during a news conference after polls closed in the capital, Asuncion. He will succeed President Nicanor Duarte on Aug. 15.

Lugo campaigned on promises to restore Paraguay's ``energy sovereignty'' by charging neighboring Brazil and Argentina more for electricity generated by the country's biggest hydroelectric dams. He also railed against the gap between large landowners and the country's poor majority.

``Paraguay is a major soybean producer and an important energy producer but even with that, 35 percent of the population lives in poverty,'' said Riordan Roett, director of Western Hemisphere Studies at the Johns Hopkins University's School of Advanced International Studies. ``That is one of the great reasons Lugo was able to win this race.''

Agriculture, including soybeans and cattle ranching, accounts for about 40 percent of Paraguay's $9.1 billion economy, the U.S. Agency for International Development said. Annual per capita income is about $4,700, the agency said.

Lula Response

Brazilian President Luiz Inacio Lula da Silva, speaking at a United Nations event today in Accra, Ghana, rejected Lugo's suggestion that Brazil should pay more for energy generated at the Itaipu dam, which Brazil helped build in the 1970s.

``We have a treaty and we're going to keep that treaty,'' Lula said, according to O Globo, based in Rio de Janeiro.

Lugo resigned his position as a Roman Catholic bishop in one of Paraguay's poorest regions in order to run for president. After being ordained in 1977, the Church sent him to Ecuador. There, working among the poor in the Andes, he said he became a supporter of ``liberation theology,'' a strain of Christian thought that emphasizes political activism.

Duarte, 51, took ``responsibility'' for his party's defeat and vowed to stay engaged in the country's politics. Roett said Duarte will likely be the Colorado Party's leader in the senate, pending the outcome of yesterday's legislative elections.

Duarte Pledge

``The Colorado Party will now fight for its convictions and for Paraguay from the opposition,'' Duarte said last night in a televised news conference.

From 1947 to 1962, the Colorado Party was the only legal party in Paraguay, ruled by General Alfredo Stroessner from 1954 to 1989. During that time the country became infamous as a refuge for Nazi war criminals, including Joseph Mengele. The party stayed in power after a military coup ousted Stroessner, who died in exile in Brazil two years ago at the age of 93.

``People got tired of the ruling party and that's why an inexperienced politician, a former bishop, managed to defeat the region's oldest ruling party,'' Horacio Galeano Perrone, a former education minister, said by telephone. ``While the country got poorer, a few people got much richer.''

To contact the reporters on this story: Bill Faries in Buenos Aires at wfaries@bloomberg.net; Eliana Raszewski in Buenos Aires eraszewski@bloomberg.net.

Last Updated: April 21, 2008 16:58 EDT