With a view to fostering private investment, Ecuador has passed
a Law on Incentives for Public-Private Partnerships and Foreign
Investment containing a series of tax benefits for undertaking
public projects, including exemptions from income tax, foreign
currency remittance tax, foreign trade taxes, and other benefits.
It also guarantees legal stability of the specific, sectoral rules
declared essential in the pertinent agreements or permits for
operating in strategic sectors or provision of public services.
Additionally, it has issued General Regulations for Application
of the Law on Incentives for Public-Private Partnerships and
Foreign Investments, which introduces essential elements regarding
public-private partnerships (PPPs), rules on their structuring,
specific features for private initiatives, systems or mechanisms
for compensation in the event of early termination, deferred
payments, financing guarantees, etc.
Under this model the first PPP agreements have been signed in
the ports sector, involving Puerto Bolívar, with an
investment of approximately USD 750 million, and the Posorja Deep
Water Port with an investment of USD 1.2 billion.
Additionally, other PPP projects are currently being promoted by
the central government in the transportation area. In the maritime
sector, for example, the Manta Deep Water Port and, in ground
transportation, another three projects: Huaquillas-Rio 7,
Naranjal-Rio 7, and Santo Domingo-Quevedo-Babahoyo-Jujan.
To facilitate identification of investment opportunities the
Ministry for Strategic Sector Coordination published a Catalogue of
Strategic Investments 2015-2017, identifying projects requiring
direct private investment, as well as projects planned for PPP
Other projects requiring investment
In addition to the projects mentioned as PPP possibilities, many
others are being offered by the Ecuadorian government as investment
opportunities that do not establish a specific investment mechanism
and that can be implemented via other alternatives including
different systems of association, acquisition or purchase of the
full project, participation in corporate capital, etc. The sectors
involved include oil and gas, mining, electricity,
telecommunications, and banking, among others. Some of these
projects have arisen out of the Ecuadorian government's
initiative to sell off certain government corporations, or
interests in such corporations.
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