Celec is looking for investment banking to monitor negotiations with PowerChina for Coca Codo Sinclair

The international investment bank, selected through a tender, will accompany the Government of Ecuador in the negotiation process with PowerChina executives, in order to reach eventual agreements on the fate of the Coca Codo Sinclair hydroelectric plant.

This power plant supplies 30% of the country’s electricity, but presents a number of problems due to construction errors and natural problems.

Although the talks were currently on hold, as the leaders of PowerChine preferred not to come to the country due to the current situation in which the prosecutor’s office opened a case of alleged bribery related to the construction of the power plant, which cost the country some 3,200 million dollars, the Minister of Energy and Mining, Fernando Santos, believes that these negotiations will take place in the coming months, and for that Celec is preparing the foundations for engaging investment banks.

Minister Santos has a general idea of ​​the issues that must be addressed in the said negotiations, which are extensive and complex. Compensations must be made.

Santos explains that the PowerChina mission was supposed to arrive in the second week of March, but after the prosecutor’s actions against former president Lenín Moreno and former Chinese ambassador Kai Runguo, who represented Sinohydro, they were worried and did not understand the scope of this process. But it was explained to them that these were two separate issues and they were again invited to come to the country to discuss and try to solve the huge problem of risk from the power plant. The minister says that the problems relate to the internal condition of the plant, where there are cracks that are increasing in depth and represent a potential risk.

When asked what might be the incentive or benefit for Sinohydro or PowerChina to agree to take over this problematic asset, the minister indicated that Coca Codo Sinclair is the largest power plant built by Chinese companies abroad. However, according to the analyst’s criteria, it is the worst built. Explain that the main newspapers are: The Wall Street Journal and The New York Times They stated that it is the worst infrastructure work that China has done outside of China, so it affects the prestige of Sinohydr and PowerChina abroad. They claim that they can repair the plant and that they are a responsible company that honors its obligations. In this spirit, they want to take the plant into a concession and arrange it to work normally. It is a matter of prestige and preservation of a good name.

In a recent tour of Coca Codo Sinclair’s suction works by industry officials, they explained a series of measures being taken to prevent further erosion, which would cost at least $124 million. Between them, an underground screen was built to prevent erosion, and in May a tender will be announced for the construction of a permeable dam. It is also planned to announce another tender for the construction of the spillway. It is a kind of stairs through which the water descends in a controlled manner.

At the same time, more than 17,000 cracks were found on the distributors or propellers of the drive, which were the result of a factory defect, because the steel did not meet the established standards.