Photo: Ministerio de Turismo Ecuador.
The Government of Ecuador has confirmed a settlement agreement with Power China, formerly Sinohydro, regarding the legal dispute over the Coca Codo Sinclair hydroelectric plant. Minister of Energy and Mines Inés Manzano announced that the agreement, though not yet finalized, represents a key step toward resolving the international arbitration process initiated by Ecuador’s state-owned electricity company, Celec.
The dispute stems from structural issues in the plant, inaugurated in 2016 with more than $3.3 billion in Chinese financing. Since its opening, the facility has reported over 17,000 cracks in critical components and is under threat from the backward erosion of the Coca River, which compromises water intake infrastructure.
While the arbitration process is still technically ongoing, Manzano indicated that both parties have reached important points of consensus. Separately, Foreign Minister Gabriela Sommerfeld revealed that a parallel agreement is being negotiated for Power China to take over the operation and maintenance of the plant under a contract estimated at $400 million.
Officials clarified that the proposed arrangement is not a concession. Instead, the Ecuadorian state would retain full ownership of Coca Codo Sinclair, while Power China would manage operations and maintenance for a defined period in exchange for a generation-based fee.
Former Energy Minister Carlos Pérez expressed support for the current administration’s decision, noting that similar arrangements had been considered in previous governments. Ecuador continues to service its outstanding debt of approximately $1.8 billion to Chinese banks, while Celec is pursuing $580 million in damages through arbitration for construction defects.
* Original text in Spanish. Translated by Large Language Model (LLM) technology.
Main Source:
Gobierno de Ecuador confirma acuerdo de conciliación con Power China sobre Coca Codo – El Comercio
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