Ecuador’s Biggest Wind Farm Seeks a $104 Million Lifeline

Energy

A long-stalled wind project in Ecuador has taken a concrete step toward construction, with a request for outside money that would help end years of delay.

A wind farm meant to be the largest in Ecuador is seeking a major loan to get itself built at last. Villonacoenergy, the local arm of the Spanish infrastructure group Cobra, has asked IDB Invest for 104 million dollars to finance the Villonaco III project in the southern highlands.

IDB Invest is the private-sector lending arm of the Inter-American Development Bank, a Washington-based institution that funds development across the region. Its board is scheduled to decide on the loan on July 28.

What the project would build

The plant will rise in the province of Loja, near an existing wind complex of the same name, and carry a capacity of 112 megawatts. That would make it the biggest wind farm in the country once it is running.

The works take in 19 turbines, an electrical substation and a transmission line of about 24 kilometres, all under a 25-year concession granted by the state. The power produced will be sold under long-term contracts to nine state-owned distribution companies.

The full project has long been costed at around 181 million dollars, so the requested loan would cover a large slice of the bill, with the developer carrying the rest. First power has slipped repeatedly and is now hoped for in 2027.

Why it matters for Ecuador

The timing speaks to a real weakness. Ecuador leans heavily on hydropower, and a string of droughts left reservoirs low and forced rounds of electricity rationing that darkened homes and idled factories.

Wind offers a hedge, because it tends to blow hardest in the dry months when the rivers run thin. A project that adds steady, non-hydro power in the south is therefore worth more to the grid than its size alone suggests.

For investors, the request is also a signal. A multilateral lender backing private renewable money in Ecuador points to a slow return of confidence, in a country whose energy plans have stalled for want of financing as often as for want of will.

The history explains the caution. The concession was first awarded back in 2023, yet construction never started, snagged for years on land permits and on the basic question of how a cash-strapped state would reliably pay a private generator for its power.

That payment puzzle was eventually answered with a layered guarantee. Private generators are paid first out of the distributors’ revenue, the state stands behind that promise, and a contingency fund tied to the development bank sits underneath as a final backstop.

If the loan clears the board, the project would mark one of the larger pieces of private clean-energy investment to move forward in Ecuador in some time. It would also test whether the financing scaffolding built to rescue it can carry other stalled renewable plans behind it.

There is a regional angle too. Spanish infrastructure groups have been steady backers of Andean energy and transport, and a fresh commitment of this size suggests European money still sees value in Ecuador despite its security troubles and tight public finances.

Frequently Asked Questions

What is Villonaco III?

It is a 112 megawatt wind farm planned for the province of Loja in southern Ecuador, set to be the largest in the country. It is being developed by Villonacoenergy, the local unit of Spain‘s Grupo Cobra, under a 25-year state concession.

Who would provide the money?

The developer has asked IDB Invest, the private-sector arm of the Inter-American Development Bank, for a loan of 104 million dollars. The bank’s board is due to decide on July 28, and the wider project has been costed at about 181 million dollars.

Why does Ecuador need it?

Ecuador relies on hydropower and has suffered droughts that forced electricity rationing. Wind power blows strongest in the dry season, so the farm would help shore up supply when reservoirs are low, with first output now hoped for in 2027.