Ecuador seals $400mn deal on troubled Coca Codo Sinclair, hands operations to China’s PowerChina

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Ecuador is set to formally take control of its largest hydroelectric plant, Coca Codo Sinclair, after reaching a $400mn settlement with Chinese builder Sinohydro , while simultaneously granting long-term operational control to its parent firm PowerChina . The agreement concludes years of dispute over construction defects and contractual obligations tied to the 1,500-megawatt facility, which supplies between 25% and 30% of Ecuador’s electricity. Despite the transfer of ownership to the state, PowerChina will oversee operations and maintenance for 25 years, raising concerns over accountability given its link to the original contractor. Technical scrutiny has long surrounded the project. Inspections have identified more than 17,000 fissures in critical components, far exceeding earlier estimates and forcing repeated repairs that have constrained efficiency. Under the new arrangement, PowerChina will be responsible for addressing these structural flaws. Beyond engineering issues, environmental risks are intensifying. The erosion of the Coca River — a process that has accelerated in recent years — threatens key infrastructure linked to the plant. The phenomenon has already led to the collapse of a major waterfall and placed pressure on nearby energy and transport systems. Experts warn that continued upstream erosion could eventually compromise the plant’s intake structures. The project, financed largely by Chinese credit during the administration of Rafael Correa , has become emblematic of the challenges tied to large-scale infrastructure deals in the region, including oversight gaps and long-term operational risks. While the government frames the agreement as a pragmatic resolution that secures compensation and technical support, the decision underscores the trade-offs facing Ecuador as it balances energy security with structural and environmental vulnerabilities. © 2026 bne IntelliNews, source Magazine

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