QUITO, Aug 9 (Reuters) - Ecuador's government said on Tuesday its capacity to meet its external debt obligations had not been affected by a Luxembourg court's decision to freeze the South American country's assets amid a dispute with Anglo-French oil company Perenco.

 QUITO, Aug 9 (Reuters) - Ecuador's government said on Tuesday its capacity to meet its external debt obligations had not been affected by a Luxembourg court's decision to freeze the South American country's assets amid a dispute with Anglo-French oil company Perenco.

Ecuador has "promptly complied" with interest and amortization payments on bonds for $185.7 million, which were due on July 31, the country's economy ministry said in a statement.

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The Andean nation will pay its debts to the oil company, the economy ministry said, adding that the payment has been complicated because Perenco still owes tax in the country.

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"We welcome Ecuador's statement that they will pay the award, although we have had no contact from Ecuador in this regard," Perenco said.

Ecuador agreed unconditionally to pay the compensation in full by July 2021, a Perenco spokesperson told Reuters.

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"The local tax settlement is entirely unrelated to the international award or its payment obligation by Ecuador," the spokesperson said. "It is now more than one year in default."

Ecuadorean President Guillermo Lasso promised in June 2021 to pay compensation to Perenco after the World Bank's International Centre for Settlement of Investment Disputes (ICSID) ruled Ecuador had unlawfully ended a production-sharing agreement with the company.

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Perenco sued Ecuador in 2008 and was ultimately awarded $412 million in May 2021.

But the ICSID ordered Perenco to pay compensation to Ecuador in relation to environmental damage it caused in areas where it operated, leaving the company with a net award of $374.3 million.

Including interest, Perenco is entitled to $391 million.

At the end of last month, a Luxembourg bailiff ordered 122 banking entities operating in the European country to freeze assets held by Ecuador amid a dispute over payment of the award. read more

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Ecuador defaulted on $17.4 billion of foreign debt two years ago as the country buckled under one of the region's worst coronavirus outbreaks following years of economic stagnation.

As part of the debt restructuring that followed, Ecuador sold new bonds maturing in 2030, 2035 and 2040 which are listed on the Luxembourg stock exchange.

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Reporting by Alexandra Valencia in Quito; Additional reporting by Rowena Edwards in London; Writing by Oliver Griffin; Editing by Jane Merriman and Paul Simao

Our Standards: The Thomson Reuters Trust Principles.