The Republic of Ecuador will soon begin work on a $2 billion hydroelectric project that’s been in the planning stages for more than 40 years thanks to a loan from China’s Export-Import (Exim) Bank.
“It’s a way a promote the business of Chinese companies in Ecuador,” said Jorge Diaz-Silveira, a partner at law firm Hogan and Hartson in Miami, which negotiated the engineering and procurement contract for the project. It is the largest project of its type in the South American country, he added.
The Ecuadorean government will own and manage the project through a wholly-owned subsidiary company called Compania Hidroelectrica Coca Codo Sinclair.
The project will produce 1,500 megawatts of electricity per year when operational and provide electricity to the cities of Quito, Guayaquil and Cuenca, according to a project profile on the Initiative for Conservation in the Andean Amazon (ICAA) website. That will constitute about 55 percent of the country’s annual electricity consumption, according to the website.
Diaz-Silveira said the project was conceived of as a way to decrease Ecuador’s dependence on foreign electricity purchases from neighbouring Peru and Colombia. He estimates that those purchases constitute between 10 percent to 30 percent of the country’s electricity needs each year.
Diaz-Silveira said the engineering and procurement contract for the project was executed on 5 October. Construction on the project is slated to begin by the end of the year, he added.