Ecuadorean President Rafael Correa threatened Wednesday to default on a more than US$200 million loan granted by a Brazilian development bank to build a hydroelectric plant in central Ecuador that had to be closed.

Correa also sent Ecuadorean soldiers to occupy the plant and local offices of the Brazilian construction company that built it, Norberto Odebrecht.

The loan from Brazil's state-owned National Development Bank financed nearly three-quarters of the plant, which closed on June 6.

Correa said the US$338 million plant was poorly constructed by Odebrecht and expelled the company from Ecuador on Tuesday, ordering its assets seized and prohibiting company executives from leaving the country.

"I love Brazil very much but what this company has done in Ecuador is terrible," Correa said Wednesday.

Two Odebrecht executives took refuge at the Brazilian ambassador's house in Quito, while two others left the country before the decree, including Odebrecht's director in Ecuador, Fabio Gandolfo, according to Odebrecht vice president Paulo Oliveira Melo.

Melo told The Associated Press that the Brazilian government is negotiating with Ecuadorean authorities to allow the executives to return to Brazil. He said Odebrecht's offices were calm despite the army's presence.

Odebrecht operates four separate construction projects in Ecuador that employ 3,800 workers and are worth some US$650 million. Company officials say Ecuadorean soldiers also were occupying at least two of the other project sites.

Odebrecht said it has offered to repair the power plant for free, and to pay Ecuador US$43 million that it estimates the plant has lost in income since its closure.

The plant was expected to supply 12 percent of Ecuador's electricity demand.

Brazilian President Luiz Inacio Lula da Silva said Wednesday that he expects to find a solution to the conflict between Odebrecht and Ecuador, according to Brazil's official Agencia Brasil news agency.

"Obviously I expect Brazil's Foreign Ministry will do everything that has to be done and when the time comes to speak with Rafael (Correa) I will do so. I have no doubt that we will reach an agreement," said Silva, who was in New York attending a U.N. assembly.

Odebrecht said volcanic ash from the nearby Tungurahua volcano caused unanticipated erosion of the tunnels and machinery at the plant's entrance, and cited its "faithful compliance with all of the promises" in negotiations over repairs to the closed plant.

The Tungurahua volcano has been active for 10 years, dumping ash on nearby villages as recently as February and July.

Odebrecht Vice President Paulo Oliveira Melo said he expected negotiations to improve after Sunday's referendum in Ecuador to decide whether to adopt a new constitution promoted by Correa.

"This only complicates things," Melo said.

But political analyst Adrian Bonilla of Quito said the close timing with the referendum is probably only a coincidence.

"The government has shown sufficient evidence of noncompliance" to justify its actions, Bonilla said.

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Associated Press writer Tales Azzoni and Stan Lehman in Sao Paulo, Brazil, and Frank Bajak in Bogota, Colombia, contributed to this report.