Celec Regains Path To Terminate Failed Esmeraldas III Contract

Contract status

Celec says it has recovered the ability to continue the administrative process against ATM for the failed Esmeraldas III thermal project.

The change follows the July 15, 2026 archive of an emergency arbitration process. Those measures had blocked Celec for about a year from terminating the contract, executing guarantees, or applying fines.

As of July 28, 2026, the termination had not yet been registered in Sercop.

Project details

Celec contracted ATM on August 9, 2024 to build the 91 MW Esmeraldas III thermoelectric plant for USD 89.9 million.

The plant was supposed to enter operation in late 2024 or early 2025 as part of Ecuador's emergency thermal-generation response to the 2024 power crisis, when rationing reached up to 14 hours.

According to the source, 30 of 48 turbogenerators were configured for 50 Hz, while Ecuador's grid uses 60 Hz.

Fines connected to the project are close to USD 23 million. The contract includes a clause allowing unilateral termination when fines exceed 5% of the contract value.

Business signal

This is an energy-security and procurement-risk story.

Ecuador needed fast thermal generation to reduce exposure to hydrological stress. Instead, the Esmeraldas III dispute highlights the execution risk of emergency procurement, technical compatibility, imported equipment, contractual guarantees, and arbitration-driven delays.

What to watch

• Whether Celec registers unilateral termination in Sercop
• Whether guarantees and fines are executed
• Whether replacement capacity is contracted before the next dry-season stress window
• Whether future emergency procurement receives tighter technical controls

Source: Primicias.