Ecuador to Accept Coca Codo Sinclair by April 17 — Despite 7,600 Unfixed Fissures

The Settlement

Ecuador's state electricity company Celec will formally accept the Coca Codo Sinclair hydroelectric plant from its builder, China's Sinohydro, by April 17, 2026.

The reception follows a settlement award issued by the International Chamber of Commerce (ICC) tribunal on March 30, 2026, which resolved the multi-year arbitration between Celec and Sinohydro. The award was notified to both parties on April 3.

Upon formal reception, Celec will release approximately $200 million in performance guarantees back to Sinohydro.

The Infrastructure Problem

Coca Codo Sinclair — Ecuador's largest hydroelectric facility at 1,500 megawatts — was inaugurated in November 2016 after construction by Sinohydro with Chinese state financing.

The plant has been plagued by defects since commissioning:

• 7,600+ fissures documented in the water distributors, according to a 2018 Comptroller's Office (Contraloría) report
• The Comptroller ordered Sinohydro to replace the defective equipment before formal reception
• The replacements were never completed. Despite the order, Ecuador is proceeding with acceptance as-is under the ICC settlement terms
• The plant currently operates at less than half its rated capacity due to equipment degradation and external factors

Why It Matters

Coca Codo Sinclair was supposed to be Ecuador's energy independence project — a mega-dam that would make the country a net electricity exporter. Instead:

• The plant underperforms chronically, contributing to the 2024 blackout crisis when drought reduced hydroelectric output nationwide
• The Coca River erosion near the plant's water intake has created an ongoing geological threat, with the river progressively cutting into the hillside near critical infrastructure
• Ecuador's energy matrix remains vulnerable to drought because hydroelectric power accounts for approximately 75% of total generation

What This Means for Expats

• Blackout risk hasn't disappeared. The formal reception of Coca Codo Sinclair doesn't fix its operational limitations. If dry conditions return later in 2026, power rationing remains possible
• The $200 million in returned guarantees is leverage Ecuador is surrendering. Once Sinohydro has its money back, there's no mechanism to compel future repairs
• Ecuador's infrastructure dependency on China is a recurring theme — Coca Codo Sinclair is the largest example, but Chinese-built and financed projects across Ecuador's infrastructure portfolio have faced similar quality and completion issues
• For those tracking Ecuador's investment climate, the willingness to accept a flawed megaproject and release guarantees sends a mixed signal about the country's infrastructure governance

Sources: Primicias, Expreso, El Comercio, Celec