The fourth largest debtor to IMF, Ecuador said to be in talks for another $1.3 billion loan for El Niño relief

According to the Bloomberg news agency, Ecuador’s Finance Ministry is negotiating with the International Monetary Fund (IMF) for a $1.3 billion loan for El Niño damage relief. The report follows a Friday denial by President Daniel Noboa that the country will seek new IMF loans.

The developing El Niño could cause prolonged flooding to low-lying areas, especially on the coast.

“Our financing needs are covered for the 2026 budget and if we need additional funding for El Niño we will pursue it from sources other than the IMF,” Noboa said in a Radio Platinum interview. He acknowledged that the El Niño could be “devastating,” especially in the coastal region, adding that preparations are “well underway to control and mitigate the damage.”

The 1997-1998 El Niño caused an estimated $6 billion in damage in 2026-adjusted dollars and forecasters predict the El Niño forming in the Pacific Ocean will be even stronger. The 1997-1998 El Niño left some communities isolated for months and destroyed the country’s railway system that was never rebuilt.

Forecasters say the effects of the developing El Niño will begin to be felt in November, with the intensity increasing through early 2027.

Ecuador ranks fourth in total debt to the IMF, holding 5.8% of the fund’s outstanding resources. Argentina, Ukraine and Pakistan hold 35%, 8.5% and 6.7% respectively.

If IMF grants another loan to Ecuador, Bloomberg said it would come from its Resilience and Sustainability Trust, a fund created to finance countries’ recovery from extreme weather events.