The Ecuadorian government has formally began negotiations with a Chinese firm to build the country's biggest hydropower plant, the Energy Ministry said on Tuesday.

Chinese ambassador to Ecuador Cai Runguo and Ecuadorian Energy Minister Germanico Pinto signed on Monday an agreement of intention to set technical, juridical and economic mechanisms for a final agreement on the contract.

Ecuador will have until June to decide whether or not to give the project to the Chinese state-owned Sinohydro-Andes.

The Coca-Codo-Sinclair plant, to be located about 75 km east of Quito, will have a capacity of 1,500 megawatts to cover 75 percent of the country's energy demand.

Ecuadorian government said the reference value of the project is of US$2 billion, 85 percent of which will be financed by Sinohydro-Andes.

Chinese ambassador Cai said Chinese companies and banks are interested in cooperation with Ecuador on other hydropower projects.