Sinohydro, China's biggest dam builder, is at risk of losing its role as the main contractor in a US$2 billion contract to build Ecuador's biggest dam, which also represents the biggest overseas hydroelectric project ever taken on by a Chinese firm.
However, the state-owned firm will try to retain its role at the 1,500-megawatt Coca-Codo-Sinclaire dam project, Daniele Crisa, a Sinohydro spokeswoman, said.
Its problems stem from problems between the Ecuador government and the Export-Import Bank of China (Eximbank) over financing of the hydro scheme.
After talks between the Ecuador government and Eximbank failed earlier this month, the bank's offer to finance 85 per cent of the project could fall through. That would spark a new tender process in which Sinohydro would have to compete for the contract again, Crisa said.
'Sinohydro will bid for it,' she said. 'Sinohydro has a good chance of winning the international bid. After all, it built half of the world's hydroelectric power projects, so it would be a convenient partner.'
By the end of last year, Sinohydro's international orders totalled 74 billion yuan (HK$84 billion) and for the first time surpassed its domestic orders. The company aims to raise at least 12.9 billion yuan from an initial public offering in Shanghai this year.
In October last year, the government of the South American nation signed a contract with Sinohydro to build the dam. However, Ecuador President Rafael Correa said last weekend he 'unilaterally ended' talks on March 17 with Eximbank and was seeking financing from other sources, including Taiwan.
