An article by Lili Pike, published by China Dialogue
In the past year, Egypt signed contracts
to build the world’s largest coal-fired power plant and broke ground on
the world’s largest solar farm – both with the help of Chinese banks and
contractors.
to build the world’s largest coal-fired power plant and broke ground on
the world’s largest solar farm – both with the help of Chinese banks and
contractors.
These mega projects highlight a growing
gap between China’s vision of South-South climate cooperation, which
prioritises clean energy projects, and its actual investments across the
African continent, which still include coal
and hydropower projects that pose serious environmental risks.
gap between China’s vision of South-South climate cooperation, which
prioritises clean energy projects, and its actual investments across the
African continent, which still include coal
and hydropower projects that pose serious environmental risks.
Leaders from 53 African nations are
gathered in Beijing from September 3-4 for the triennial Forum on China
Africa Cooperation (FOCAC). Established in 2000, FOCAC is an arena for
China and Africa to deepen their political and
economic ties, which are increasingly important given that China has
become Africa’s third largest investor.
gathered in Beijing from September 3-4 for the triennial Forum on China
Africa Cooperation (FOCAC). Established in 2000, FOCAC is an arena for
China and Africa to deepen their political and
economic ties, which are increasingly important given that China has
become Africa’s third largest investor.
At past summits, Chinese presidents
committed major loans to African nations – US$5 billion in 2006, US$10
billion in 2009, US$20 billion in 2012, tripling to US$60 billion in
more broadly defined “investment” in 2015.
committed major loans to African nations – US$5 billion in 2006, US$10
billion in 2009, US$20 billion in 2012, tripling to US$60 billion in
more broadly defined “investment” in 2015.
A portion of these loans has gone toward
energy projects. Boston University data shows that energy lending to
Africa by the Export-Import Bank of China, and China Development Bank,
which are the main financiers of the country’s
overseas investment, went primarily to hydropower, oil, and coal from
2000-2016.
energy projects. Boston University data shows that energy lending to
Africa by the Export-Import Bank of China, and China Development Bank,
which are the main financiers of the country’s
overseas investment, went primarily to hydropower, oil, and coal from
2000-2016.
Although China is still funding fossil
fuel projects and hydropower (the latter is low-carbon compared to
natural gas or coal-fired power but it produces more greenhouse gases
than wind and solar), it has signalled at previous
FOCAC summits the need to mitigate climate change in its investment
decisions.
fuel projects and hydropower (the latter is low-carbon compared to
natural gas or coal-fired power but it produces more greenhouse gases
than wind and solar), it has signalled at previous
FOCAC summits the need to mitigate climate change in its investment
decisions.
At the 2009 FOCAC, Premier Wen Jiabao
proposed an initiative to build 100 clean-energy projects in Africa.
China’s US$3.1 billion South-South Climate Cooperation Fund was
referenced in the 2015 FOCAC action plan as a way to bolster
climate action in Africa.
proposed an initiative to build 100 clean-energy projects in Africa.
China’s US$3.1 billion South-South Climate Cooperation Fund was
referenced in the 2015 FOCAC action plan as a way to bolster
climate action in Africa.
Nonetheless, some experts think that
China is not taking strong enough action. In a recent podcast interview
by The China Africa Project, experts anticipated green issues would be
side-lined at this year’s conference. Civil society
leaders in Africa have called for change: Makoma Lekalakala, director
of the non-governmental organisation Earthlife Africa in Johannesburg,
said “We hope that at this year’s FOCAC there will be a greater focus on
Chinese investment in clean energy in Africa.”
China is not taking strong enough action. In a recent podcast interview
by The China Africa Project, experts anticipated green issues would be
side-lined at this year’s conference. Civil society
leaders in Africa have called for change: Makoma Lekalakala, director
of the non-governmental organisation Earthlife Africa in Johannesburg,
said “We hope that at this year’s FOCAC there will be a greater focus on
Chinese investment in clean energy in Africa.”
China is in a position to shape the
direction of Africa’s energy development. According to a report by Oil
Change International, China was the largest provider of public finance
for energy development in Africa from 2014 to 2016.
Most of this went to upstream oil and gas (72%), followed by coal-fired
power and large hydropower projects.
direction of Africa’s energy development. According to a report by Oil
Change International, China was the largest provider of public finance
for energy development in Africa from 2014 to 2016.
Most of this went to upstream oil and gas (72%), followed by coal-fired
power and large hydropower projects.
Around a third of African coal-fired
power plants built in the decade up to 2016 were constructed by Chinese
contractors, the majority with Chinese funding, according to a 2016
report by the International Energy Agency (IEA).
power plants built in the decade up to 2016 were constructed by Chinese
contractors, the majority with Chinese funding, according to a 2016
report by the International Energy Agency (IEA).
Coalswarm, a Wiki encyclopaedia that
tracks coal projects globally, shows that China has been involved in the
finance or construction of 15,700 megawatts of coal capacity in Africa –
around 10% of the continent’s total power capacity
(168,000 megawatts in 2016).
tracks coal projects globally, shows that China has been involved in the
finance or construction of 15,700 megawatts of coal capacity in Africa –
around 10% of the continent’s total power capacity
(168,000 megawatts in 2016).
These coal power projects have typically
been located in countries with domestic coal resources: almost
three-quarters of Chinese-built coal-fired capacity is in Southern
Africa where coal reserves are available, the IEA report
says.
been located in countries with domestic coal resources: almost
three-quarters of Chinese-built coal-fired capacity is in Southern
Africa where coal reserves are available, the IEA report
says.
However, new projects have been proposed
in countries where coal is not a mainstay of power generation, including
Kenya, Ghana, and Egypt. The latter’s 6,600-megawatt Hamarawein mega
project, which will be built by Chinese contractors,
represents a further backslide toward coal following Egypt’s reversal
on a ban on imports for coal power in 2015.
in countries where coal is not a mainstay of power generation, including
Kenya, Ghana, and Egypt. The latter’s 6,600-megawatt Hamarawein mega
project, which will be built by Chinese contractors,
represents a further backslide toward coal following Egypt’s reversal
on a ban on imports for coal power in 2015.
China’s involvement in Africa’s renewable
energy sector (excluding hydropower) has been limited. According to
IEA, from 2006-2016 only 7% of Chinese-built power generation in
Sub-Saharan Africa were non-hydropower renewable plants.
These include solar projects in Comoros, Kenya, DRC, and Senegal, and
wind projects in Djibouti and Kenya.
energy sector (excluding hydropower) has been limited. According to
IEA, from 2006-2016 only 7% of Chinese-built power generation in
Sub-Saharan Africa were non-hydropower renewable plants.
These include solar projects in Comoros, Kenya, DRC, and Senegal, and
wind projects in Djibouti and Kenya.
However, a new wave of projects is on the
horizon. A 2018 report from the Institute for Energy Economics and
Financial Analysis (IEEFA) cited an additional 200-megawatt solar farm
to be built by PowerChina in Bui, Ghana; and the
244.5 megawatt De Aar wind farm being built by China’s Longyuan Power
Group Corporation near Cape Town, South Africa; along with the Benban
solar farm in Egypt.
horizon. A 2018 report from the Institute for Energy Economics and
Financial Analysis (IEEFA) cited an additional 200-megawatt solar farm
to be built by PowerChina in Bui, Ghana; and the
244.5 megawatt De Aar wind farm being built by China’s Longyuan Power
Group Corporation near Cape Town, South Africa; along with the Benban
solar farm in Egypt.
Chinese solar and wind companies are also
serving as equipment manufacturers and suppliers. In 2014, Jinko Solar
built a solar PV factory in South Africa, and GCL just announced it is
following suit in Egypt, increasing the companies’
access to the African market.
serving as equipment manufacturers and suppliers. In 2014, Jinko Solar
built a solar PV factory in South Africa, and GCL just announced it is
following suit in Egypt, increasing the companies’
access to the African market.
The South-South Climate Cooperation Fund,
launched in 2015, established a vision of China as an emissary of clean
energy in other developing countries. One of the fund’s goals is to
support 100 climate mitigation and adaptation
projects.
launched in 2015, established a vision of China as an emissary of clean
energy in other developing countries. One of the fund’s goals is to
support 100 climate mitigation and adaptation
projects.
The fund has had a slow start. However,
Wang Binbin, a researcher at Peking University, argues it is gathering
pace and will be helped by the creation in April of China’s first aid
agency, which will assume responsibility for
the fund.
Wang Binbin, a researcher at Peking University, argues it is gathering
pace and will be helped by the creation in April of China’s first aid
agency, which will assume responsibility for
the fund.
Directing both climate aid and loans
toward renewable energy would have major implications for Africa’s
energy development. For instance, Kenya aims to be a clean energy hub by
harnessing its rich renewable energy resources, but
it is also planning to build its first coal-fired power plant with the
help of Chinese financing. A change in China’s investment priorities
could alter Kenya’s calculus about coal as other international lenders
are increasingly unwilling to support such projects.
toward renewable energy would have major implications for Africa’s
energy development. For instance, Kenya aims to be a clean energy hub by
harnessing its rich renewable energy resources, but
it is also planning to build its first coal-fired power plant with the
help of Chinese financing. A change in China’s investment priorities
could alter Kenya’s calculus about coal as other international lenders
are increasingly unwilling to support such projects.
Egypt’s Benban solar farm, which is
part-financed by the Asian Infrastructure Investment Bank – China’s
flagship multilateral bank, could help drive a shift towards renewable
projects, although the bank has been criticised for
not sufficiently delivering on its motto to be “green, lean, and
clean.”
part-financed by the Asian Infrastructure Investment Bank – China’s
flagship multilateral bank, could help drive a shift towards renewable
projects, although the bank has been criticised for
not sufficiently delivering on its motto to be “green, lean, and
clean.”
The significant stock of fossil energy
projects China has built in Africa means that it will take much more
than a few high-level pledges and pilot projects. With climate change
visibly impacting Africa from Cape Town’s severe
drought to desertification in Mali, FOCAC presents an opportunity for
leaders to align energy development with the reality of climate change.
projects China has built in Africa means that it will take much more
than a few high-level pledges and pilot projects. With climate change
visibly impacting Africa from Cape Town’s severe
drought to desertification in Mali, FOCAC presents an opportunity for
leaders to align energy development with the reality of climate change.
