Ecuador bets on infrastructure to drive economic growth in 2025

In recent years Ecuador has made crucial strides to become Latin America’s newest investment hub. In 2025, the country is betting on infrastructure, writes Adrian Ganic, Reporter at the Danish Development Research Network (DDRN).

Under President Daniel Noboa, the country has cracked down on organised crime, improved fiscal sustainability and brokered a deal with the IMF to secure $4billion at cheap interest rates.  

Yet, challenges remain. Should Noboa be reelected in April this year a chief concern will be to continue implementing his long-term development strategy. His administration is currently pushing to attract foreign investment, most notably through the expansion of Ecuador's public-private partnership (PPP) infrastructure sector. 

Ecuador expanding its infrastructure benefits importers of Ecuadorian goods as transport will become faster, more reliable, and cheaper. There will also be ample opportunities for international financiers, developers and anyone involved with infrastructure. 

Private infrastructure investment as economic catalyst

“Ecuador is sending very clear signals that we want to increase the participation of the private sector in more parts of the economy,” Pablo Cevallos Palomeque, Ecuador’s Secretary of Public-Private Investments, told LatAm INVESTOR. 

The country’s PPP infrastructure portfolio contains projects worth over $10billion, with plans for future growth. Under a PPP scheme, the government partners with private companies, granting them concessions to finance, build, and operate public infrastructure—such as roads, bridges, or hospitals. PPP projects create investment opportunities for the private sector, while delivering critical infrastructure to states which might not have the financial capability to otherwise construct it.

Secretary Cevallos and his agency estimate that 30,000-40,000 jobs will be generated for every $1billion of investment. These will come in the form of people involved with the projects directly, but also from service providers and indirect beneficiaries by the creation of value chains. 

Three road projects are currently the most advanced, all backed by the World Bank’s International Finance Corporation (IFC). The projects have already garnered interest from international firms, Secretary Cevallos confirms, with the IFC’s involvement ensuring that they will be correctly structured and profitable for the private partner. 

Revamped legal framework

Ecuador has tried to increase its attractiveness as an investment destination before—with lacklustre results. This time, things may be different. The country passed a new PPP law in 2023, raising standards and facilitating investment in infrastructure, tourism and other sectors. Secretary Cevallos calls the legislation a “definitive cut-off point that constitutes a watershed moment in the history of private investment in Ecuador”. Investors agree. Infrascope, the Economist’s private infrastructure index, upgraded Ecuador to 9th in Latin America in 2024 from 15^th in 2023.

Ecuador is sending very clear signals that we want to increase the participation of the private sector in more parts of the economy

The government is pushing additional regulations to enable private investment opportunities. The Investment Contract, for instance, provides tax incentives and further benefits for companies making new investments in Ecuador. Other mechanisms focus on optimising support and implementation of national and foreign investment projects. These are older legislations, but Noboa’s government appears determined to implement them effectively—and, again, the market seems to be responding. Ecuador’s dollar bonds have delivered a total return of 95% during his time in office.

There is also a concerted effort to unlock Ecuador’s vast natural resources, with ample opportunities for solar and wind energy generation. The country recently approved a new law stipulating that energy projects up to 100 MW can be wholly owned by private firms. Modernised energy infrastructure has the potential to improve the competitiveness of Ecuador’s mining industry. 

Going forward

“Ecuador is a new market, considering that we are building an ecosystem of investment that will allow judicial security, very high standards for project structuring and working intensely to ensure these projects are bankable. This way, the conditions are in place for firms in the region to see Ecuador as a new opportunity to expand and have access to new markets with capacity already installed,” Secretary Cevallos concludes. 

Indeed, Ecuador is still asserting itself, and the government’s plan is far from a certainty. The continuing issues of violence and crime risk derailing Noboa’s agenda. His best bet, however, is to increase employment in the formal economy. Incentivising private infrastructure and making other market sectors more dynamic can certainly help. Hopefully, this momentum will translate into lasting economic growth, attracting sustained investment and fostering stability.