Ecuador’s Finance Minister Sariha Moya announced that Chinese state-owned PowerChina will pay the Ecuadorian government $400 million in compensation for serious defects and losses linked to the Coca Codo Sinclair hydroelectric project, built by Sinohydro. The $3 billion dam, launched in 2016 with Xi Jinping attending its inauguration, has been plagued by cracks, leaks, corruption scandals, and ecological damage, with experts warning its lifespan may be only 15 years instead of the promised 50.
Ecuador had originally sought $580 million in arbitration, while China countersued, but the settlement marks a partial resolution. The case highlights broader problems with China’s infrastructure projects abroad: opaque loans, poor construction, corruption, and political fallout.
Similar controversies have emerged elsewhere: Nepal’s Pokhara International Airport (built with Chinese loans) is deemed substandard; Serbia’s Novi Sad railway station collapse killed 16 and sparked mass protests; and other Chinese-financed projects across Latin America face scrutiny.
Commentators note that China’s BRI model – relying on money, corruption, and construction contracts to secure influence in targeted countries – is backfiring. Instead of winning allies, Beijing now faces reputational damage and a growing wave of compensation claims, with Ecuador setting a precedent that other countries may follow.
Source: Epoch Times, August 26, 2025
https://www.epochtimes.com/gb/25/8/26/n14581281.htm