Mpakeni Dam firm in E1.2bn bribery case

MBABANE – The company contracted to build the Mpakeni Dam through a joint venture is embroiled in a bribery case in Ecuador where its representatives have been imprisoned.

Also imprisoned alongside Sinohydro’s representatives is the former President of Ecuador, Lenin Voltaire Moreno who was, however, the deputy president, when he allegedly received the bribe. Representatives of Sinohydro who were sentenced to five years imprisonment are Yang Huijun and Song Dongsheng.

Former Chinese ambassador to Ecuador Cai Runguo was also sentenced to imprisonment.

Song Dongsheng and Yang Huijun are former top executives of the Chinese state-owned engineering company Sinohydro. Song Dongsheng served as the Chairman of Sinohydro and President of PowerChina International, while Yang Huijun acted as an executive and legal representative for the corporation.

Song held the role of chairman of the parent company, leading its international expansions, large-scale infrastructure investments and global dam-building projects.

Based on the company’s profile, as the international business flagship and a subsidiary of PowerChina Corporation, Sinohydro Corporation Limited “is the bearer of the Sinohydro brand and has continuously updated its value. With diversified operations in over 100 countries, Sinohydro Corporation Limited says it is an internationally renowned and management-oriented contractor as its businesses cover almost all areas of the construction sector, including energy, transport, water works, civil engineering and building.

Former President Moreno’s wife, daughter and brother, as well as former plant managers were also jailed for the same offence.

Prosecutors alleged that Sinohydro, which is owned by the Chinese State, paid a total of E1.2 billion (US$76.1 million (£56.2 million) through shell companies to people involved in the deal to secure the construction of the Coca Codo Sinclair hydroelectric dam. The case has been filed as ‘Caso Sinohydro (Corte Nacional de Justicia – National Court of Justice)’.

In its August 28, 2026, Press Release No. 1005-DC-2026, the Attorney General’s Office stated that, during 31 days of trial, demonstrated the existence of improper payments linked to the awarding and execution of the Coca Codo Sinclair hydroelectric project.

Based on the evidence presented by the institution, the National Court of Justice found 24 defendants criminally responsible for the crime of bribery.

The Times of Eswatini SUNDAY has seen the case as filed by the Auditor General’s Office. It is said that the State Attorney General’s Office (Fiscalia General del Estado) handled the high-profile Sinohydro corruption case because it involved allegations of international bribery, shell companies and abuse of power by top-tier public officials. From a prosecutorial perspective the State Prosecutor General’s Office (Fiscalia General del Estado) was there to present and defend evidence to the judge.

According to the court records, the investigation established that the funds had been channelled through companies, intermediaries, bank transfers, and alleged consulting and representation services.

Among the evidence presented in court are financial records and transactions, corporate and commercial documentation, contracts and documents related to companies and intermediaries as well as expert reports that made it possible to establish the routes and beneficiaries of the investigated resources.

To support its accusation, the prosecutor’s office presented 29 testimonies, 20 expert reports and 90 pieces of documentary evidence, including information obtained through international criminal cooperation mechanisms.

The sentence also includes the payment of comprehensive, individualised reparations for each of the convicted individuals, totalling over E2.6 billion (US$163 million). They must also issue public apologies, and the sentence has been ordered to be published on the websites of the Vice Presidency of the Republic, CELEC EP and the Attorney General’s Office.

Lenin Moreno, the former President of Ecuador is the most high profile convict in the Sinohydro case (Pic: Independent)

The prosecution was led by the acting Attorney General, Leonardo Alarcón.

During the trial, the acting AG, Leonardo Alarcón, stated that this structure mobilised approximately E1.2 billion (US$76.1 million) in improper payments, an amount equivalent to about four per cent of the value of the contract for the construction of the Coca Codo Sinclair hydroelectric project.

The investigation by the Attorney General’s Office further revealed an alleged corruption network surrounding the Coca-Codo Sinclair hydroelectric project, which reportedly operated between 2009 and 2018 in exchange for large sums of money.

Though it took 31 days to conclude the case in 2026, it dates back to 2008. Resolution No. 001/08, dated January 31, 2008, the Board of Directors of the National Electricity Council (Conecel) resolves to ‘declare the Coca-Codo Sinclair Hydroelectric Project, with a capacity of 1 500MW, to be developed by the national government, in the province of Napo, canton of El Chaco, parish of Gonzalo Díaz de Pineda, as a high national priority’.

On September 25, 2008, the tender notice No. CCS-001-2008 is published for the ‘contracting of engineering, provision of equipment and materials, construction of civil works, assembly, testing and commissioning of the Coca-Codo Sinclair hydroelectric project, with a capacity of 1 500MW’.

On January 13, 2009, during the bidding process, bidders were required to include financing for construction in their proposals. Furthermore, it was stated that the number of bidders was limited as the project’s value was approximately E30 billion (US$1 682 000 000), equivalent to 85 per cent of the total cost, with the Ecuadorian Government covering the remaining 15 per cent. In other words, the project had a total value of E31.7 billion (US$1 979 700 000).

Gezhouba and Sinohydro Corporation (the latter had initially submitted its offer as part of the Sinohydro – Andes JV Cía. Ltda. Consortium) submitted their bids.

On October 3, 2009, the general shareholders’ meeting of Coca-Codo Sinclair accepted the offer from Sinohydro Corporation, authorising Ítalo Centanaro, General Manager of Coca-Codo Sinclair, to sign the contract under the ‘Engineering Procurement and Construction (EPC) modality, also known as turnkey’.

Sinohydro has a presence in Eswatini through the construction of the Mpakeni Dam valued at E2.6 billion.

The company formed the Sakhalive Joint Venture (JV) to construct the dam. The joint venture (JV) is between two Chinese firms, Yellow River and Sinohydro. This is not to suggest that the JV in Eswatini has a case to answer in Ecuador or Yellow River is involved. The only firm that is in implicated in the court case is Sinohydro, which forms part of the JV.

However, research indicates that the Sinohydro branch or project office operating in Ecuador and the one in Eswatini are part of the same ultimate corporate family.

It is said that while multinational construction giants use localised project offices, country-level branches or unique legal subsidiaries for tax, compliance and contract purposes, they are not completely independent companies. It has been learnt that both entities (Ecuador and Eswatini) answer to the exact same ultimate State-owned parent organisation based in Beijing, China, which is the Power Construction Corporation of China (PowerChina).

The project serves as a central pillar of the larger Mkhondvo-Ngwavuma Water Augmentation Project (MNWAP). The dam is being funded through a loan from the African Development Bank (AfDB) and is expected to be completed by April 2028.

The MNWAP is an infrastructure and irrigation project aimed at poverty alleviation in the Shiselweni Region of the Kingdom of Eswatini. The project is being implemented in two phases. Component one comprises the construction of the Mpakeni Dam on the Ngwavuma River (Component 1A) and associated downstream conveyance to irrigate approximately 5 000 hectares at Sigwe, Maloma, Mconcwane/Mcathuvane and St Philips (Component 1B).

On the other hand, component two comprises the construction of the most feasible option for the transfer of water from the Mkhondvo River to augment the limited water in the Ngwavuma River at the Mpakeni Dam.

According to AfDB, the feasible option for the water transfer involves the construction of either the Mahamba Gorge Dam and downstream conveyance or the Ethemba Dam and its downstream conveyance or a combination of both. It is understood that component two will see an expansion of irrigation infrastructure to Greater Lavumisa, Somntongo and Matsanjeni areas where approximately 25 000 hectares would be irrigated.

The bank stated that the combined irrigated areas for all the project components would add up to about 30 000 hectares, benefiting approximately 100 000 people.

Asked whether they, as Sinohydro, were aware of the case, Hu, one of the company’s executives, stated: “We don’t know about this situation now, most of us don’t know the case.”

Later on, when Hu was told that certain global media outlets reported on the case, he responded: “Yah, even me know the case by internet just now.” He said it was this publication that led him to the case and did not make any further comment.

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