Articles
Business intelligence and analysis on Ecuador
Coca Codo Sinclair Erosion: Army Corps Warns Damage Could Reach Intake by 2026
The U.S. Army Corps of Engineers has warned that erosion along the Coca River could reach the intake structure of Ecuador's 1,500 MW Coca Codo Sinclair hydroelectric plant by 2026. The plant generates approximately one-third of Ecuador's electricity. While recent rains have improved reservoir levels and a new 200 MW plant has come online, peak demand of approximately 4,500 MW continues to strain the system.
World Bank Projects 2% GDP Growth for Ecuador in 2026; Tax Reform Likely
The World Bank projects Ecuador's GDP will grow 2% in 2026, among the lowest rates in Latin America. With a fiscal deficit of 3-4% of GDP, the expiration of the security contribution ($330 million), and weakening oil receipts, multilateral institutions consider tax reform increasingly likely. The government faces a structural revenue gap that existing measures cannot close.
Ecuador's Oil Output Drops to 466,400 bbl/d in January -- 13% Below Decade Average; Pipeline Theft Epidemic Costs $100M/Year
Ecuador's crude oil production averaged 466,400 barrels per day in January 2026, a 1.8% year-over-year decline and 13% below the same month a decade ago. The 84,000 bbl/d gap to fiscal break-even translates to an estimated $800 million annual revenue shortfall. Illegal pipeline taps surged from 36 in 2022 to 770 in 2024, costing approximately $100 million per year as narcotrafficking organizations exploit petroleum infrastructure.
Europol-Ecuador Operation Dismantles Los Lobos Trafficking Network -- 7+ Tonnes Seized, High-Value Target Captured
A joint Europol-Ecuadorian police operation dismantled a drug trafficking network linked to the Los Lobos criminal organization, seizing more than 7 tonnes of cocaine across the Netherlands, Belgium, and Ecuador. 16 individuals were arrested including a high-value logistics coordinator. The network used banana and shrimp containers for EU-bound cocaine shipments, highlighting Ecuador's growing role in European supply chains.
CAF Approves $42M Loan for Cuenca Municipal Infrastructure Development
The Development Bank of Latin America and the Caribbean (CAF) signed a $42 million loan agreement with the GAD Municipal de Cuenca for urban infrastructure development. The sovereign-guaranteed sub-national loan is one of CAF's largest municipal commitments in Ecuador outside Quito and Guayaquil, targeting water systems, urban mobility, and climate resilience at a time when Cuenca faces escalating infrastructure strain.
LATAM Ecuador Launches Cuenca-Galapagos Route -- A319 Service, $310 RT, Twice-Weekly
LATAM Ecuador launched the first-ever direct air service between Cuenca and the Galapagos Islands (Baltra) on March 31, 2026, operating twice-weekly Airbus A319 service at fares starting at $310 round-trip. The triangulation route (Cuenca-Quito-Baltra-Cuenca) adds approximately 15,000 annual seats to Galapagos-bound capacity and positions Cuenca's Mariscal La Mar Airport as a multi-destination hub.
Banana Exports Surge 9.7% in January 2026 -- U.S. Tariff Removal and Reduced Central American Competition Drive Growth
Ecuador's banana exports reached 36.59 million 40-pound boxes in January 2026, a 9.7% year-over-year increase driven by expanded production, reduced Central American competition, and the removal of 15% U.S. tariffs under the March 2026 trade deal. Separately, shrimp exports closed 2025 at a record $7.47 billion, with China absorbing nearly half of total volume.
Ecuador's Country Risk Drops to 460 Points; Allianz Trade Upgrades Rating in 2026 Atlas
Ecuador's country risk, measured by the EMBI spread, has dropped from 2,016 to 460 basis points -- a dramatic improvement reflecting fiscal consolidation, trade deal momentum, and restored IMF confidence. Allianz Trade included Ecuador among 36 economies upgraded in its 2026 Atlas. GDP growth is forecast at approximately 2% for 2026-2027, with inflation contained between 1.5% and 2.8% by dollarization.
New Mining & Energy Law Takes Effect -- Permits Streamlined, Indigenous Organizations Push Back
Ecuador's Organic Law for Strengthening Strategic Mining and Energy Sectors took effect on March 2, 2026, following a 77-70 National Assembly vote on February 26. The law replaces the environmental licensing system with a streamlined 'environmental authorization' regime, creates integrated mining clusters, and deploys the Armed Forces to protect strategic mining zones. Indigenous organizations have condemned the legislation as a rollback of constitutional protections.
UAE Signs $3B CEPA With Ecuador -- Clean Energy, Mining, and Tech Investment Roadmap
The United Arab Emirates and Ecuador signed a Comprehensive Economic Partnership Agreement (CEPA) on March 2, 2026, during the Crown Prince of Abu Dhabi's state visit to Quito. The deal eliminates or reduces tariffs on 96% or more of traded goods and establishes a $3 billion strategic investment roadmap covering renewable energy, mining, logistics, technology, and agriculture. A separate $250 million MOU was signed for surveillance and border protection infrastructure.
Ecuador-Colombia Trade War Escalates to 50% Tariffs; Andean Community Mediates
Ecuador raised tariffs on Colombian imports from 30% to 50% effective March 1, 2026, citing Colombia's failure to control organized crime along their shared border. Colombia retaliated with 50% tariffs on approximately 300 Ecuadorian products, including pharmaceuticals, plastics, and mineral fuels. Colombian trade authorities estimate the mutual tariffs could reduce bilateral trade by 75-79%. Delegations met at the Andean Community headquarters in Lima on March 25-26 without reaching resolution.
U.S.-Ecuador Trade Deal Signed -- 15% Tariff Lifted on Key Exports Worth $2.8-3.2B
The United States and Ecuador signed the Agreement on Reciprocal Trade on March 13, 2026, removing the 15% surcharge on approximately 50% of Ecuador's non-petroleum exports -- an estimated $2.8-3.2 billion in annual trade. The deal covers bananas, flowers, cacao, blueberries, tuna, gold, and copper, while Ecuador eliminates or reduces tariffs on 90% or more of U.S. agricultural products. Entry into force requires Constitutional Court approval, National Assembly ratification, and executive signature, targeted for August 2026.