Ecuador has granted a concession to a Spanish consortium to build a U$500M dam and hydro plant.

Consortium ACS-Omegaport, led by Spain’s third largest power firm Union Fenosa and including builder Actividades de Construccion y Servicios, won a concession to build the 186MW Mazar plant in Ecuador’s southern Andes.

ACS-Omegaport has 12 months to negotiate a contract with Paute, the operator of a hydro plant of the same name further upstream, to form a consortium to jointly manage the two dams and water storage for 30 years. If the companies fail to reach an agreement, Ecuador will withdraw the concession and the contract will be void.

Mazar would expand storage capacity to enable Paute to produce electricity year-round, even on dry weather, according to Ecuador’s Energy Ministry.