August 2008

Country Profile Ecuador

Ecuador has very large potential for the development of renewable energy due to its plentiful natural resources and its critical need for greater electricity capacity.
About 10 to 14 percent of electricity is currently imported from Colombia. Aggressive feed-in tariffs for renewable energy also provide a strong incentive for developers. However, major constraints are posed by the unstable political and economic environment, and by ‘black losses’ (mainly electricity theft from power lines) that prevent electricity distributors from making timely payments to generators. Resistance from local communities and opposition from NGOs have recently complicated new hydro developments.
Ecuador has a concluded Memoranda of Understanding (MoUs) with the Netherlands, Canada and Spain.
Several PDDs are currently in development. Ecuador’s CDM portfolio has shown tremendous growth from 2006, when only 3 projects were registered, to June 2008, when 23 projects were in the CDM pipeline, 13 of them registered.
About half of the projects in the Ecuadorian CDM pipeline relate to hydropower. Bagasse cogeneration and biogas flaring projects follow with about a fifth of the portfolio each. The remaining two projects in the pipeline involve wind energy and landfill gas flaring. Further biomass, geothermal and hydropower installations now being planned could also apply for carbon credits under the CDM.

Ecuador’s Designated National Authority (DNA) is the Ministry of the Environment. Technical coordination lies within the authority of the Ministry’s Climate Change Unit, which is classifies CDM projects into four sectors: 1) Clean Energy Development, 2) Clean Urban Development, 3) Clean Industrial Development and 4) Land Use Change and Forestry.
In addition to the DNA, an agency has been set up for promotion of the CDM –Corporación para la Promoción del Mecanismo de Desarrollo Limpio del Ecuador (CORDELIM). This organisation provides abundant information on CDM-relevant topics in the Ecuadorian context on its website.

Requirements for host country approval

The DNA adopted procedures for national approval of CDM project proposals by ministerial decree of April 2003. It has also adopted complementary procedures for approval of small-scale CDM-project proposals and for endorsement of CDM project ideas.
Project proponents are required to present a PDD in Spanish, including a description of their project’s contribution to national and regional development goals and priorities; compliance with national, regional and local regulations (including certificates of compliance); the technology, methods and equipment to be used; and expected positive and negative environmental and socio-economic impacts, including mitigation measures and management plans. A copy of the environmental license or EIA approval certificate (if sectoral regulations require one) must also be attached. The documentation is subjected to a preliminary assessment, after which an assessment agreement is signed between the DNA and the project proponents. For final evaluation, an ad-hoc evaluation group visits the project site and assesses the documentation in detail. If needed, additional information can be required from project proponents and/or others (e.g. sectoral or local governmental agencies), and local public consultations may be organised.
The relevant documents are available in Spanish on the CORDELIM website.

Further selected information:

Ecuadorian Environment Ministry
Oficina Nacional de Promoción del Mecanismo de Desarrollo Limpio del Ecuador (CORDELIM)
German Embassy in Quito
German Foreign Office: Information on Ecuador
Bertelsmann Ecuador Country Profile
CIA World Fact Book Ecuador
GTZ in Ecuador
German-Ecuadorian Commerce and Industrial Chamber
Country Information Ecuador of the World Bank
European Commission: The EU’s Relations with Ecuador