LEON, Mexico (Reuters) Oct 8 2009 - Ecuador aims to double hydroelectric power use over the next decade and increase grid capacity to attract mining investment but must overcome local opposition, a senior official said on Thursday.
Ecuador wants 86 percent of its electricity needs to be covered by hydroelectric power by 2020, up from 43 percent now, Luis Castelo, an official at Ecuador's ministry of electricity and renewable energy, told Reuters in an interview.
"We have massive hydroelectric resources in the country that have not been exploited for a long time," Castelo said at a climate forum in the central Mexican city of Leon.
But he said one challenge is to appease local communities in the Amazon region that have voiced opposition to large-scale hydroelectric projects.
"There is a lot of resistance from the indigenous communities. There's been a lot of effort to work with the communities so they see the projects as a source of jobs."
The ministry, created in 2007, is now charged with implementing a clause in the country's new constitution that commits to increasing Ecuador's use of renewable energy.
Ecuador has world-class precious metals deposits that have yet to be exploited and increased electricity capacity could help lure investors. "The mining industry demands a lot of electricity. We are proposing to increase the electricity supply precisely for mining uses," Castelo said.
The aim is to reduce the country's reliance on diesel imports, since oil-producing Ecuador does not have refining capacity, he added.
Chinese company Sinohydro has signed a contract with President Rafael Correa to build a $2 billion hydroelectric project along the Amazon river, which will be the country's largest with a capacity of 1,500 MW.
The project will be 85-percent financed by a Chinese bank and the government will provide the other 15 percent for construction to be completed by 2015.
Ecuador is seeking investors for other big dam projects but says companies must come with their own financing.