Ecuador plans to add 3 new projects to national PPP registry

Ecuador’s public-private investments department SIPP plans to add three new projects to the national PPP registry by the end of the year.

The projects are the Cardenillo and Santiago hydroelectric plants and the multipurpose bulk terminal of the Guayaquil port authority, PPP secretary Pablo Cevallos told BNamericas.

The PPP registry is integrated into Source, a platform developed with funding from multilateral banks and supported by the Euroclima program through German development agency GIZ.

The registry currently comprises eight projects: the Manta-Quevedo, Montecristi-Jipijapa-La Cadena, Pifo-Y de Baeza, Bahía-Cojimies, Ambato-Baños-Puyo and Loja-Catamayo highways, the modernization of Esmeralda port and the southern Guayaquil viaduct, which was the last to be added in July.

President Daniel Noboa, who will finish his term in May 2024, hopes to advance several PPP projects so they can be put out to tender next year.

Presidential and legislative elections will be held in February and, if a runoff is necessary, it will be in April.

Noboa, who is seeking reelection, has as his main rival Luisa González, candidate of former president Rafael Correa (2007-17).

“Our objective is to complete the feasibility stage of the first three projects [Manta-Quevedo, Montecristi-Jipijapa-La Cadena and Pifo-Y de Baeza] and submit them to the finance ministry for the first report. With this first report and with 11 projects incorporated into the national registry of PPP projects, we will await the development of political events,” Cevallos said.

The most advanced projects in the portfolio are the Manta-Quevedo and Pifo-Y de Baeza roads, which have prefeasibility studies carried out under a non-reimbursable cooperation agreement with the World Bank.

The fiscal risk sustainability files of each project must be sent to the finance ministry. Once the ministry approves the reports, they will be made public.

At the same time, agreements are being signed with the International Finance Corporation (IFC) to carry out the feasibility phase, which, according to Cevallos' estimates, could take six to eight months.

PPP draft contracts

In the first half of the year, SIPP opened for comment the draft public-private partnership contracts, which should be used as a basis for bidding processes starting next year.

The drafts were prepared with advice and financing from Latin American development bank CAF and are based on Colombia's fifth generation infrastructure contracts but adapted to local conditions.

“We have received many comments from companies interested in Ecuador’s PPP agenda, as well as from law firms and various civil society parties, and we are processing them,” Cevallos said.

The comments range from ones related to dispute resolution mechanisms to the obligations of the State in the contract, including a series of aspects that seek to ensure that these legal instruments are in line with the expectations of the market and financiers, said Cevallos.

The draft contracts will be approved after the first market surveys that will be carried out during the feasibility stage of the first projects.

According to Cevallos, within the framework of these surveys, it is hoped to incorporate the contractual conditions that investors need.