Who pays the price for Progen? Hint: it might be you

Those of us who spent the 2024 blackouts arranging our days around the next appearance of a spark of electricity might wonder what became of the generators Ecuador bought to end them.

The country paid out a total of about $104 million toward two new power plants, the equipment arrived, the deadlines passed, and the plants never entered service. The machinery is still here and is impounded as evidence, while investigators and judges try to establish who was responsible for the fiasco and what, if anything, can be recovered.

The transaction itself was simple, even if the aftermath is not. In August 2024, the state electricity company, CELEC, signed contracts worth $149.1 million with Progen Industries, a Florida company, to supply, install and commission generating equipment at Salitral and Quevedo, together providing 150 megawatts. Ecuador disbursed roughly 70% of that value against early constactual milestones, without any demonstration that either plant could produce the promised power output. These were contracts for working power plants, so simply delivering machinery on a flatbed truck was only the beginning of the obligation.

The state of emergency related to power shortages in late 2024 allowed fast-track procurement, and Progen offered express delivery, but its representatives had already been approaching Ecuadorian officials before any formal selection of bidders took place. Karla Saud, acting through H&S Industry, promoted the proposals, and senior officials, including then Energy Minister Roberto Luque and CELEC manager Fabián Calero, had visited purported Progen facilities in Mulberry, Florida. The contracts were then awarded through CELEC’s Termopichincha unit.

Progen was a real American business, registered in Florida years before these contracts, and it advertised successful completion of earlier power projects in Alaska, “Africa”, and the Middle East. Registration and a fancy website, however, do not show that a contractor with some successful minor projects has the resources and experience for a large scale job in South America, and some of the references that Progen’s offered to support its qualifications are now disputed, including a certificate from a company partially owned by its own executives.

CELEC’s lawsuit in Florida alleges something worse than an a project that failed. It accuses Progen and associated parties of misrepresenting their experience and manufacturing capacity, submitting false references and supplying used generators that were repainted and relabeled to look new, while claiming that the engines were fully reconditioned and “as new” when there were in fact not.

Primicias reports that documents from that case trace 21 of the 29 Salitral generators to used units Progen bought for about $8.9 million, for which CELEC paid about $69 million. Ecuador’s comptroller general has separately put the harm to the state at $100 million. These allegations remain subject to ongoing litigation, and none of them has become a verdict.

Progen’s defense is that Ecuadorian officials knew exactly what they were buying.

Its chief executive, John Manning, says the generating sets were to use existing engines and alternators restored to “zero hours,” rather than new machinery. That business about ‘zero hours’ needs some interpretation, because a used engine can be dismantled, inspected, rebuilt and tested, after which its operating record restarts from the overhaul. It remains an engine with a history, and whether it is effectively “like new” depends very much on the work performed, the quality of the work,  and the evidence supporting the claim. Manning maintains that senior officials understood what was being supplied, Luque denies his account, and what the written contracts actually permitted is actually central to the whole dispute.

So why didn’t the plants ever work? We have only a partial answer. The available evidence describes equipment deficiencies, disputed specifications, incomplete delivery and unfinished commissioning, and investigators reported old machinery, inconsistent identification plates and inadequate proof of refurbishment to “as new” status.

Available public reporting does not provide a detailed engineering diagnosis of why each unit failed to enter service, and failure to deliver a properly functioning plant does not prove every engine is mechanically useless, though it must be said that an engine that fires up is not necessarily one that can supply reliable electricity at its advertised output.

There were indeed a number of technical objections before the contracts were completed. Members of CELEC’s market-study committee say they identified missing manufacturer backing, inconsistent fuel-consumption figures and inadequate certification that the engines were “as new”, and one member, Romel Llumiquinga, told prosecutors that the committee recorded its objections and resisted pressure to remove them.

Inspector Celso Sánchez separately reported seeing old equipment in the United States and alleged that he was under pressure to approve it despite deficiencies (but from whom?) Both men, however, appear on the prosecution’s list of people charged with peculado, the misuse of public funds, which complicates any hopes of a tidy line between those who warned and those who approved the deal.

Checking was therefore never the job of a single engineer. CELEC personnel prepared, reviewed and approved the specifications, committees evaluated the offers, managers authorized the contracting, and contract administrators supervised execution and payment milestones, so any competent investigation must establish which safeguards failed and whether particular individuals were deceived, negligent or knowingly involved.

If proven, the allegations of false documents and altered equipment identification could support a case for deliberate deception, and the reported warnings make “nobody noticed” an inadequate explanation. Whether supplier fraud was assisted by corruption inside Ecuador remains a question for the courts (and perhaps for well-informed CHL commenters who have access to more information than the author.)

Former Energy Minister Inés Manzano has featured prominently in media accounts, although she is not among the 30 defendants heading toward the next hearing. She took charge of the ministry in October 2024, after the contracts were signed, and says she inherited the arrangements, did not personally authorize CELEC’s payments and that she later supported investigations and legal action against Progen. Further payments nonetheless did occur during her administration, and published communications show her discussing possible contract amendments with Manning.

Ecuavisa also published a recording attributed to Manzano discussing how to handle legislative scrutiny and advising Calero to keep his answers brief, and the reporting raised the question of whether oversight was being managed to protect officials, an allegation no criminal judgment has established.

Manzano now lives in Spain, and her lawyers asked that she give a further statement to prosecutors by Zoom, but the prosecutor’s office insisted on attendance in person. She did not appear for the September 25 summons in 2026, shortly before the investigative phase closed. That summons concerned a statement to investigators rather than trial testimony, and her absence is not a court judgment on her conduct.

Judge Ximena Rodríguez has scheduled the evaluation and preparatory hearing for November 9th to November 20th, 2026 in Quito, covering 30 defendants who include Calero, technical and administrative personnel and Progen representatives.

This stage of proceedings decides who will stand trial and on what charges, it is not the trial itself, and no trial date has been confirmed in the available reporting. Former minister Antonio Gonçalves, who appealed his pretrial detention in July, is no longer among them.

Meanwhile, the separate American lawsuit seeks financial recovery, though winning a claim and collecting the money are different achievements, and reporting on the tracing of Progen’s funds suggests collection may be difficult.

That leaves a second kind of recovery, which is useful electricity or resale value from the equipment already here. The delivered generators remain mainly at Salitral and Quevedo, and in June CELEC asked a judge for permission to inspect and repair machinery held as evidence, proposing specialist assessments to find out whether some generating capacity could be recovered. The request shows that there is interest in rehabilitation, but it does not prove that rehabilitation would be economical compared to, for example, buying new equipment from overseas.

An independent assessment should sort the units into those that can be made serviceable at reasonable cost, those needing uneconomic repairs and those useful mainly for parts, because the money already spent cannot be unspent and the next decision should depend on what additional spending would buy.

Usable generators might help complete the public plants, and others could be sold to industrial companies or fish farms needing their own supply, since a factory might find value in a properly tested secondhand generator if its price, fuel consumption, maintenance needs and spare-parts supply made sense. None of this is an announced government program, and any sale would require legal clearance, independent valuation and an honest description of the machinery’s condition, because Ecuador hardly needs another transaction in which the description is more impressive than the equipment.

Nor can anyone assume that supplying diesel and transformers to correct the output voltage would solve everything, since engineers must first establish which units can start, sustain output and operate safely, and what additional equipment they might need before they can be hooked up to the national grid.

Ecuador therefore needs answers to two questions: who was responsible for spending so much money without obtaining the promised result, and what electricity, equipment or resale value can still be recovered/ Convictions might answer the first, but they will probably not claw back the public funds spent or shed any light into the darkest corners of government.