Ecuador Attracts Green Investment

Local and international investors are looking at Ecuadorean green energy projects, but the country is still regarded as a high-risk market given its lack of long-term energy policies and political instability. Interest in the auction is high despite the time it has taken to sign agreements for similar projects, such as the 14.4MW Conolophus solar project in the Galapagos Islands. The project was awarded in August 2021, but its contract has not been finalized because a trust to purchase the plant’s power has not been created. Developers cannot start building the plant because the banks that finance the project require a trust that guarantees energy payments. Only a few countries in Latin America meet these requirements and many funds have not invested in Ecuadorean renewables projects, Blanco says. Most regional nations work instead with multilateral institutions such as the World Bank, the Inter-American Development Bank or the Andean Development Corporation to finance such projects. Local banks are also granting more loans to small and large-scale green projects in the country. The association of private banks of Ecuador tells Argus that the amount of green loans awarded in 2021 rose to $312mn from $202mn two years earlier. These loans are focused on renewable power projects, energy efficiency programmes, clean production and sustainable construction for small and medium-size companies, corporations, and clients. Cluster Financiero is a group of 93 institutions related to the banking system that work together to improve the competitiveness of the sector in Ecuador. The group is working on creating a pool of information on the main renewable power projects to organize it and present it in a more appealing way to possible investors, Cluster Financiero executive director Diego Utreras says. The idea aims to provide funding for these kinds of initiatives in the country.