On the second day of the analysis of the urgent economic project of energy competitiveness, the Commission for Economic Development received explanations from the Minister of Production and Foreign Trade, Sonsoles García, on the need to make the project sustainable, which requires private investment in energy projects and clarified that it is not privatization.

After that speech, several representatives of the private sector dedicated to energy production were received, who requested greater clarity of legal certainty that will be provided for investments in the energy field, for which they proposed adjustments to the regulations.

The legislative commission begins the analysis of the urgent law on energy competitiveness

The official from the production portfolio, in the telematic presentation, conducted an analysis of the foreign direct investment process for the energy transition, and speaking of Ecuador, he said that between 2018 and 2022, the average investment reached 6.9 billion dollars, and the year that attracted the most investment was 2020, after the pandemic of COVID- 19; Namely, our country participated with about 0.7% of all foreign direct investments registered only in the electric power sector in the world.

In the last five years, 16 investment contracts in the electricity sector with a total value of $780 million have been approved, creating more than 990 direct jobs for the country.

He emphasized that one of the goals of the urgent investment project is that the state can exceptionally delegate to private companies and companies of the national and solidarity economy participation in the activities of the public sector in the services of electricity and public lighting through selection processes when it is necessary for the satisfaction of the public. interest or when the service cannot be provided by public companies.

García clarified that the exceptional delegation to the private sector is not the privatization of electrical services or infrastructure that should be provided by the Ecuadorian state, but what is required is efficiency and effectiveness. within the process of electricity. “Privatization is prohibited by the Constitution and is not the end of what this law requires,” he repeated.

He also referred to the exceptionality of including renewable energy sources through free zones, but under the condition that there is an emergency situation in the power sector or a state of emergency has been declared so that they can be incorporated into multi-business projects in free zones and infrastructure. because additional electricity can be created for production and transmission; and as long as the private sector can do so within the free zones already established, since these will not be single business free zones, nor will free zones be created for this purpose, but will operate in already established zones.

In addition, he said the projects could be electricity generation or transmission to meet national demand.

In order to attract more foreign direct investment, in terms of renewable energy sources, it is important, said García, to emphasize tax residency in Ecuador, since what Ecuador needs today is tax transparency, and therefore we should not, as the central government and as legislative commission, try to encourage the creation of structures that help to avoid paying local taxes, but rather have clear rules so that a foreign direct investor wants to take over property in Ecuador and wants to pay taxes.

Criticism of the project came from Correismo’s representative in the commission, Blasco Luna, who asserted that there is a contradiction in the law, because it says that bringing in foreign investments and the same law eliminates possible state investments from other countries, so he asked that the texts be adjusted so as not to limit the participation of other governments in the projects of energy companies such as the People’s Republic of China.

He also asked to clarify that this urgent project does not immediately enable us to have an electric power system and avoid power outages, adjustments must be made for that.

President of the Commission for Economic Development, Valentina Centeno (ADN)he explained that the exclusion, in the project, of foreign state-owned companies from investing in electric power projects is due to the fact that the public selection process cannot be followed under the same conditions as the private one and that it could be distorted as a direct delegation of the state to the state without following the prescribed and appropriate procedures .

However, he said that if he guaranteed that foreign state-owned companies would participate on an equal footing with private companies, “I would agree that it should be kept.”but with that clarification, so as not to misrepresent that the direct allocation can be made from country to country, and to avoid that it is really the investor with the best conditions and the most suitable for the investment it is allocated.

Minister Sonsoles García, responding to this concern of legislator Blasco Luna, indicated that when there is an investment, especially in strategic sectors from state to state, it is under a special regime and does not go to public tender.

Legislator Jorge Álvarez (PSC) intervened to point out that the law must guarantee compliance with the law on public electricity services, where it is forbidden to index the prices of garbage collection services to the prices of public electricity services. of energy, because they increase the price and raise the final value of the electricity bill.