Ecuador is facing a crippling energy crisis, with daily blackouts stretching up to 10 hours, severely disrupting daily life and straining the nation’s fragile economy. These power cuts, exacerbated by a prolonged dry spell impacting hydroelectric power generation, have highlighted the country’s heavy dependence on rainfall for more than 70% of its electricity. The situation is quickly becoming a significant political challenge for President Daniel Noboa, whose reelection bid in February could be jeopardized by the ongoing crisis.
The outages have caused widespread disruptions, from malfunctioning traffic lights to interrupted internet service. Residents have been asked to limit their use of high-power appliances like washing machines, while many businesses have struggled to maintain operations. In industries such as dairy farming, production has dropped significantly due to difficulties in feeding cattle and processing milk. Industrial sectors, including domestic appliance makers, have also suffered, with some companies reporting a 50% drop in sales.
Ecuador’s central bank had initially projected a 0.9% GDP growth for 2024, but this is now considered unrealistic, given the economic toll of the power shortages. Meanwhile, the country’s bonds have lost value, reflecting growing concerns among investors that the ongoing crisis could fuel support for opposition candidates with less fiscal discipline.
In response to the crisis, Noboa’s government has introduced several short-term measures, such as appointing a new energy minister and increasing private investment caps in the electricity sector. However, real structural change requires significant investment and time—two things Ecuador is short on. The government has also imported emergency power from a Turkish barge, but this stopgap solution falls short of covering the national deficit.
As Ecuadorians brace for further blackouts, the question remains whether Noboa can stabilize the energy sector in time to salvage both the economy and his political future.
