chapter  6
41 Pages

Evading sustainable development standards

Case studies on hydroelectric projects in Ecuador
WithMaría Cristina Vallejo, Betty Espinosa, Francisco Venes, Víctor López, Susana Anda

China has been a crucial source of development finance for Ecuador over the last decade. In particular, Chinese policy banks and contractors have helped develop six of Ecuador’s eight emblematic hydroelectric dams as part of the nation’s shift away from fossil fuel reliance for energy. This shift, while reducing the carbon intensity of the nation’s energy matrix, also brings new social and environmental risks. Hydroelectric dams can be associated with community displacement, changes in local livelihoods, and threats to the availability and quality of water for fishing and domestic use. Over the last few decades, development finance institutions and the Ecuadorian government itself have developed a series of social and environmental safeguards to mitigate these risks. This chapter compares two recent dams to explore the extent to which safeguards have been successfully implemented: Coca-Codo Sinclair (PHCCS), financed by the Export-Import Bank of China (China Ex-Im), and the Baba Multipurpose Project (PMB), initially financed by the Inter-American Development Bank but ultimately implemented with funds from the Ecuadoran public budget. It finds that China Ex-Im’s safeguards did not create better outcomes at the PHCCS than at the PMB. Furthermore, in both cases, the extent to which safeguards were effective depended more on the mobilization of local civil society than on the existence of de jure safeguards.