Ecuador to sue Brazil's Odebrecht over plant

* Ecuador alleges plant construction was faulty

* To seek $210 mln in damages

* Odebrecht says rejects Ecuador's charges

* Latest move against foreign investors by Correa (Adds Odebrecht response in paragraphs 6 and 7)

By Alexandra Valencia

QUITO, April 7 (Reuters) - Ecuador said it would sue Brazilian builder Odebrecht for $210 million, alleging faulty construction of a hydroelectric plant, the latest move against foreign investors by President Rafael Correa ahead of an April 26 general election.

Correa frayed ties with Brazil last year after he expelled Odebrecht and later launched an international suit to halt payments on a Brazilian loan linked to the company.

"It was easy to see that Ecuador was swindled by Odebrecht," said Jorge Glass, a government official in charge of the planned lawsuits. "We will demand via courts about $210 million."

He declined to say when the suits would be filed, or if they would be filed abroad or in local courts.

Ecuador alleges that Odebrecht failed to build the San Francisco electricity plant properly, and illegally raised the price of the job. The plant had to shut down for repairs a year after its construction.

Odebrecht said in a written statement it rejects any charges of wrongdoing and has no knowledge of the findings of an audit group hired by Ecuador to examine the San Francisco plant.

"We have hired an international engineering company to clarify the temporary disruption of San Francisco," the company said. "Odebrech continues open for talks."

CORREA'S TOUGH STANCE

Even as the global crisis hurts Ecuador's economy and government income, Correa remains aggressive with foreign investors, seeking to gain more benefits for the state in new deals.

Correa is expected to win re-election and key local government seats to consolidate his socialist revolution in the April 26 general election, pollsters say.

Since taking office in 2007, he has remained popular, in part because of his tough stance against foreign investors whom he accuses of pillaging the OPEC nation's wealth.

Most Ecuadoreans have applauded Correa's move to default on $3.2 billion in foreign debt he charges was issued illegally by past administrations.

Analysts expect Correa to propose tough terms to bond holders in restructuring the defaulted debt.

In September, Correa ejected Odebrecht and sent troops to seize its projects in the Andean nation, only days before a referendum on extending his powers.

Correa has refused to settle the row with Odebrecht.