Ecuador energy chamber calls for $300 million investment to restore thermal capacity amid prolonged drought crisis

Chamber vice president Silvana Pastor stated that Ecuador cannot continue depending exclusively on precipitation patterns and must mobilize $300 million to bring mothballed thermal plants back into operation. The country faces a generation shortfall surpassing 1,300 MW according to sector analysis, with hydroelectric output falling from a typical 77 percent capacity during wet periods to below 49 percent under current drought conditions. The 1,500 MW Coca Codo Sinclair plant, Ecuador’s largest, requires river flows between 240 and 250 cubic meters per second for optimal generation but has experienced sharp reductions since mid-September, compounded by sediment intrusion that forces emergency intake closures.

The government has announced maintenance and infrastructure spending totaling $1.19 million for transmission networks and over $1 million for distribution systems, sums that fall well short of the capital needed for thermal fleet restoration. Industrial sectors continue to operate under mandatory disconnection schedules, while authorities have refrained from specifying whether the resumption of Colombian electricity imports will trigger any relaxation of restrictions. Import pricing remains a constraint, with purchases from Colombia reaching more than $2 per kilowatt-hour during scarcity periods compared to historical ranges between $0.30 and $0.92 per kWh.

Drought impacts on the Paute-Mazar complex have forced accelerated drawdown of stored reserves to compensate for Coca Codo Sinclair’s output volatility. Ecuador’s operational planning identified November 2026 as the period of maximum pressure, yet procurement efforts over the first half of the year secured only 55 MW in new firm capacity, representing 3.9 percent of the gap flagged by grid operator CENACE. Multiple tender processes ended without valid offers or were declared void due to regulatory complications involving the national procurement service. The country now relies on thermal generation for approximately 25 percent of supply, with barge contracts from Turkey’s Karpowership undergoing renewal to sustain emergency capacity.

Economic losses from 2024 power outages totaled an estimated $1.916 billion, equivalent to 1.4 percent of GDP according to central bank figures. The current episode follows the same pattern of insufficient contingency generation and deferred investment that characterized earlier crises, with private import channels from Colombia capable of delivering up to 282 MW daily but constrained by cost and availability. Local governments will receive $455 million in additional budgetary transfers for 2026, a 11.78 percent increase intended for water, sanitation, road infrastructure and waste management rather than energy projects.