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On April 11, 2025, Executive Decree No. 595 (the “Decree”) was issued, amending the Regulations to the Law on Public Procurement (“RGLOSNCP”). The Decree was published in Official Gazette Supplement No. 19 on April 14, 2025.

According to Article 3 of the Law on Public Procurement (“LOSNCP”), when public contracts are financed by multilateral credit organizations of which Ecuador is a member, international cooperation organizations, or through government-to-government financing, these contracts will primarily be governed by the terms of the respective contracts and financing agreements. The LOSNCP will apply secondarily.

Article 2 of the RGLOSNCP provides that the financing of these contracts may be either total or partial. The Decree amends this article to clarify that “partial financing” occurs when the foreign financing entity covers at least 51% of the total contract value, and the funds are directly allocated to the contract.

Additionally, the Decree requires the National Public Procurement Service to submit, by May 8, 2025, to the General Comptroller’s Office, all procedures carried out with the participation of an intermediary under Article 3 of the LOSNCP, for oversight purposes.

 

 

Hugo García Larriva, Socio en CorralRosales
hgarcia@corralrosales.com
+593 2 2567676

 

Mario Fernández, Asociado en CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

Through Executive Decree No. 589 dated March 29, 2025, the President of the Republic of Ecuador extended the 0% Outflow Tax (ISD) rate until April 30, 2025, for the list of tariff subheadings issued by the Ministry of Economy and Finance.

The list can be reviewed at the following link: https://corralrosales.com/wp-content/uploads/2025/01/ISD-Registro-Oficial-9-70.pdf.

This regulation amends Executive Decree 468, which established the tariff subheadings subject to reduced Outflow Tax rates as of January 1, 2025. Subheadings not included in the list are subject to the 5% Outflow Tax.

 

Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

Mateo Bravo, Associate at CorralRosales
mbravo@corralrosales.com
+593 2 2544 144

 

The Ministerial Agreement MDT-2025-043; hereinafter the “Agreement”, was published on March 19, 2025, by means of the fourth supplement to Official Registry No. 1; and amends the regulations governing the administrative approval process. We highlight the following:

• It establishes that the appointment of the sponsoring attorney must be made by means of a power of attorney or by appointing them in the process, which was not clearly established in the previous regulations.
• Determines that the request for approval must be accompanied by the requirements contained in article 143 of the COGEP in its paragraphs 1,2,3,5 and 7, as follows:

1. Power of Attorney, if necessary.
2. Proof of legal representation.
3. Tax identification of the company.
4. Necessary evidence.
5. Necessary evidence.

• It details in a better way the phases of the investigation hearing; the first one composed of remediation, evacuation of previous exceptions, fixing points of debate and conciliation and the second one composed of the practice of evidence and allegations.
• Extends from 10 days to 1 month the time for the substantiation of the appeal filed against the inspector’s resolution.
• Any of the parties may request a hearing while the appeal is being heard.

 

 

Edmundo Ramos, Partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

 

María Victoria Beltrán, Senior Associate at CorralRosales
mbeltran@corralrosales.com
+593 2 2544144

 

On November 19, 2024, the Electricity Regulation and Control Agency (“ARCONEL”) issued Resolution No. ARCONEL-020/2024 (the “Resolution”), through which it approved Regulation No. ARCONEL-10/24 (the “Regulation”). This new regulatory framework governs distributed generation systems for self-supply (SGDA) of non-regulated consumers and has been in effect since its issuance.

Below is a summary of the Regulation:

1. Non-Regulated Consumers. A non-regulated consumer is an entity classified as a Large Consumer or a Self-consumer (shareholder) of a self-generator.
2. SGDA. An SGDA consists of equipment that generates electricity for the self-supply of a Non-Regulated Consumer.
3. Resource. The SGDA must use a non-conventional renewable energy resource (e.g., small-scale hydro, solar, wind, biomass, or biogas).
4. Nominal Power. The SGDA’s nominal power is capped at the maximum power demand recorded within the internal networks of the Non-Regulated Consumer. This nominal power will be determined based on the feasibility report issued by the competent distribution company.
5. Ownership. The SGDA may be owned by the Non-Regulated Consumer or by a third party.
6. Services. The Non-Regulated Consumer can engage third-party services for installation, operation, maintenance, dismantling, and other SGDA-related activities.
7. Prohibition. The commercialization of electricity generated by the SGDA is prohibited.
8. Protection and control. The SGDA must include protection and control equipment to prevent the electricity generated by the SGDA from being injected into the distribution grid.
9. Connection. The SGDA must be directly connected to the internal network of the Non-Regulated Consumer. This requirement applies to all SGDA modalities, including if the SGDA is located on a property different from that of the Non-Regulated Consumer.
10. Modalities. a. The SGDA supplies a Non-Regulated Consumer. b. The SGDA supplies multiple demands or loads associated with a Non-Regulated Consumer. c. The SGDA supplies multiple Non-Regulated Consumers, provided they belong to the same entity.
11. Bilateral Contracts. The operation of the SGDA requires updating the Bilateral Contracts of the Non-Regulated Consumer associated with it, ensuring that these contracts cover the demand not supplied by the SGDA.
12. Permits. To build and operate a SGDA, it is necessary to obtain: (i) a Feasibility Certificate from a competent public distribution company; and (ii) an Authorization Certificate from ARCONEL.
13. Term. The Authorization Certificate specifies the SGDA’s operation term, which depends on the lifespan of the technology used, as shown in the table below. The term starts when the SGDA begins operating.

 

Technology Useful life (years) Photovoltaic 25 Wind 25 Biomass 20 Biogas 20 Hydraulic 30

 

1. Isolated SGDA. Non-Regulated Consumers with an SGDA isolated from the distribution grid are not subject to compliance with the Regulation. However, for statistical purposes, they must report the location, nominal capacity, and generation technology of the SGDA to ARCONEL.

 

The Regulation repeals Regulation No. ARCERNNR-006/23, which established the previous framework for SGDA of Non-Regulated Consumers.

 

Non-Regulated Consumers who began the process of obtaining permits under Regulation No. ARCERNNR-006/23 prior to November 19, 2024, may either continue under that regulation or initiate a new process under the new Regulation.

 

Carlos Torres, Asociado Senior en CorralRosales
ctorres@corralrosales.com
+593 2 2567676

 

Mario Fernández, Asociado en CorralRosales
mfernandez@corralrosales.com
+593 2 2544144