The Brazilian Government said that payments due to BNDES last month were received. It added that following talks in late November there should be the return of its ambassador to Ecuador shortly.

The row erupted in the middle of last year following technical problems with the San Francisco plant, which led to the Ecuadorian government clamping down on Brazilian contractor Odebrecht, which helped build the plant and was heavily active in further infrastructure ventures in the country.

Alleging poor performance and both financial costs and economic impacts due to the technical problems at the plant, the Government took possession of the plant with troops and wanted money back from Odebrecht.

Odebrecht was the junior partner in Hidropastaza, the joint venture that was majority controlled by Ecuadorian state-owned utility Hidroagoyan, which was awarded the concession in early 1999.

BNDES signed an agreement worth approximately US$243M in 2000 with Hidropastaza for the export of Brazilian goods and services for the project. The plant became operational in 2007 and Odebrecht’s stake was transferred to the Ecuadorian government.

The bank noted that Ecuador is the second biggest recipient of goods and services exports it financed over 1997 to August last year, and cited a total of US$693M of funding.

The Brazilian Government said it would continue to monitor the state progress of its economic relationship with Ecuador.