By Catalino Hoyos | 2025-04-14

QUITO -- The burdensome legacy of corruption, poorly executed construction projects, cost overruns and mounting debt tied to Chinese infrastructure initiatives in Ecuador has become a central issue in the second round of the nation's presidential elections, scheduled for April 13.

President Daniel Noboa is seeking reelection against Luisa Gonzalez, the candidate of the "Correista" movement Revolución Ciudadana led by former president Rafael Correa (2007–2017), who remains a fugitive from justice.

Noboa has maintained a distance from China, instead prioritizing a strategic alliance with the United States. Under his leadership, military and anti-narcotics cooperation with Washington has intensified, and he has even floated the idea of hosting foreign military bases in Ecuador.

Gonzalez, on the other hand, advocates reviving trade relations with China while restoring diplomatic ties with countries like Venezuela. Her platform includes a broader political realignment toward closer integration with left-wing governments in the region and a return to the policies of Correa.

During the presidency of Correa -- who has lived in exile in Belgium since being convicted of corruption in April 2020 for bribery committed during his administration -- Ecuador signed numerous financial agreements and infrastructure projects with China.

Many of these deals are now under scrutiny for technical, financial and environmental failures.

In 2007, Ecuador's debt to China stood at about $7 million. After a decade under Correa's rule, that figure had skyrocketed, and today, Ecuador's oil exports remain entangled in opaque contracts with Chinese banks and companies, leaving the country trapped in what many analysts describe as a "debt trap."

Investigations such as the one conducted by the Mil Hojas Foundation -- detailed in its November 2023 book Secrets of China's Debt -- allege that during Correa's so-called Citizens' Revolution, Quito signed loan agreements with Beijing and awarded contracts to Chinese companies without public bidding, often for the very projects financed by those loans.

The book's editor, Christian Zurita, highlights that in just one year, between 2006 and 2007, foreign direct investment from China in Ecuador surged from $11.9 million to $84.8 million.

Chinese loans to Ecuador surged during Correa's two consecutive terms, with China lending Ecuador more than $24 billion between 2010 and 2019 through its state-owned and commercial banks, according to Zurita's book.

No other country has reached such a high level of financial engagement with Ecuador. By the end of 2024, Ecuador's debt to multilateral organizations approached $24 billion -- matching the scale of its obligations to China alone.

A mortgaged country

The more than $24 billion Ecuador owes to China was largely tied to oil-backed loans that mortgaged the nation's crude exports -- often with minimal royalties for the South American country.

According to the digital outlet Primicias, between 2009 and 2016, Ecuador secured $18.17 billion in financing on the condition that it sell crude oil to Chinese state-owned companies such as PetroChina and Unipec, the latter owned by Sinopec.

A glaring symbol of this lopsided deal is Coca Codo Sinclair, Ecuador's largest hydroelectric plant, now teetering on the edge of collapse. Once touted by Correa as a symbol of modernization and energy sovereignty, the plant has instead become a monument to failed promises.

Nine years after its inauguration by Chinese construction giant Sinohydro, the facility is plagued by structural defects -- most notably, thousands of cracks in its water distributors. Engineers warn of the risk of total collapse due to design flaws, poor geological placement and a lack of proper sediment management.

Despite a $3 billion investment -- financed by China's Export-Import Bank and still being repaid by Ecuador -- the plant often operates at only half its intended capacity, even though it supplies 30% of the country's electricity.

It could vanish into a sinkhole, warn observers.

Carolina Bernal, a geologist and researcher at Ecuador's National Polytechnic School, has studied the Coca River for two decades. She has long criticized the decision to build such a massive infrastructure project in a geologically fragile zone without proper environmental safeguards.

The hydroelectric plant is "doomed to disappear" because of natural conditions that builders either ignored or underestimated from the outset, Bernal told Entorno in an interview.

"It is precisely these natural conditions that now threaten the regressive erosion of the Coca River -- a process in which the riverbed erodes and retreats upstream, undermining the river's stability and flow," she explained.

The potential collapse of the plant would significantly worsen Ecuador's electricity crisis, which already forces citizens to endure frequent power rationing.

Past infrastructure projects and agreements with China have left Ecuador heavily indebted. This debt burden is a critical challenge the next Ecuadorian government will need to confront because of its long-term economic impact.