Energy Sector Projects

Energy sector projects are a significant part of the Belt and Road Initiative. Under the BRI, Chinese policy banks, commercial banks, state-owned energy companies and private energy companies are participating in hundreds of energy projects worth hundreds of billions of dollars around the world. The overwhelming majority of these projects are in coal, oil and gas, although the number of renewable energy projects is growing.

Several recent studies have collected data on Chinese energy sector projects in Belt and Road countries.

  • A 2019 study by the International Energy Agency (IEA) found an average of US$10.5 billion in annual investments and contracts by Chinese entities in the energy sectors of non-OECD Asian countries between 2013 and 2017. The study found that “China has become a major provider of capital, construction services, and equipment to the energy sectors of developing and emerging economies.”[17]
  • A 2018 study by the World Resources Institute (WRI) and Boston University’s Global Development Policy Center of Chinese energy sector financing in BRI countries from 2014 to 2017 found more than $130 billion in syndicated bank loans by six large Chinese banks, $45 billion of loans provided exclusively by China Development Bank or China ExIm, $3.5 billion of equity and debt financing from the Silk Road Fund and $60 billion of greenfield investments or merger and acquisition activity from Chinese companies.[18]

At least 10 organizations maintain databases with information on Chinese energy sector activities around the world.

  • China’s State-owned Assets Supervision and Administration Commission (SASAC) collects information on energy and other infrastructure projects with Chinese involvement in Belt and Road countries. SASAC provides high-level summaries of that data, including on the number of projects in the oil and gas sector.[19]  
  • American Enterprise Institute’s China Global Investment Tracker covers Chinese investments and construction contracts in all sectors globally dating back to 2005. It identifies over $150 billion of energy sector investments by Chinese entities globally between 2014 and 2019 and over $180 billion in energy sector construction contracts by Chinese companies abroad during the same period.[20]
  • Boston University’s Global Development Policy Center tracks overseas development finance in the energy sector provided by China Development Bank and China ExIm. It identifies roughly $125 billion of financing from these two policy banks for energy sector projects globally between 2014 and 2018.[21]
  • Mercator Institute for China Studies’ maintains a database with more than 2000 Chinese projects abroad “most often related to transport or energy infrastructure in certain parts of Asia, Europe and East Africa.” Mercator researchers find that “about two thirds of Chinese spending on completed BRI projects went into the energy sector.”[22]
  • The Center for Strategic and International Studies’ Reconnecting Asia project maintains a database of Asian infrastructure including power plants, pipeline and transmission lines. The database includes information on roughly 500 Belt and Road projects.[23]
  • Global Energy Monitor maintains a database of “coal projects receiving foreign support from a major G20 public finance institution” from 2013 through mid-2018. It finds that Chinese financial institutions were supporting roughly 27 GW of coal projects as of November 2018, with another 24 GW in the pipeline as of that date.[24]
  • Natural Resources Defense Council maintains databases of coal projects financed by G20 countries (including China) and renewable energy projects supported by Chinese entities in BRI countries.[25]
  • The East-West Institute maintains a BRI Projects Database with information on “timeline, status, financing, contracting and terms” of BRI energy sector and other projects.”[26]
  • The Chinese Academy of Social Sciences maintains a Belt and Road database with thousands of articles on Belt and Road topics, including energy.[27]
  • Xinhua News’ Silk Road database maintains information on laws and regulations in Belt and Road countries and other topics relevant to energy sector projects.[28]

Energy projects receive attention in Chinese government policy statements on the Belt and Road Initiative. The State Council’s 2015 Action Plan on the Belt and Road Initiative includes a discussion of the energy sector, saying:

We should increase cooperation in the exploration and development of coal, oil, gas, metal minerals and other conventional energy sources; advance cooperation in hydropower, nuclear power, wind power, solar power and other clean, renewable energy sources…[29]

A “Belt and Road Energy Partnership” was announced at the Second Belt and Road Forum in Beijing in April 2019. Ministers from more than 30 countries agreed to “strengthen infrastructure connectivity, enhance energy investment and promote cooperation in clean energy, energy efficiency, capacity building and personnel training.”[30]

Coal Power

Chinese companies play a significant role in the development, construction and financing of coal-fired power plants around the world. In the first half of 2019, media outlets reported on Chinese support for new coal power plants in many countries, including the Philippines, Vietnam, Indonesia, Bangladesh, Pakistan, Kenya, Mozambique, Malawi, South Africa, Zimbabwe and Serbia.[31]

Several recent studies have reported data on this topic.

  • A 2019 study by the Institute for Energy Economics and Financial Analysis (IEEFA) found that “[o]f the 399 gigawatts (GW) of coal plants currently under development outside China, Chinese financial institutions and corporations have committed or offered funding for over one-quarter of them (102 GW).”[32]
  • A 2019 study by the International Energy Agency found a Chinese role in 48 GW of coal-fired power plant capacity in non-OECD Asia between coming online between 2013 and 2022.[33]
  • A study by the Global Environmental Institute found Chinese involvement in more than 100 coal-fired power plants in planning or under construction in Belt and Road countries as of May 2017. (This included consulting, design, equipment exports, construction and financing.)[34]

Several databases maintain information on the Chinese role in coal power plants around the world.

  • Boston University’s Global Development Policy Center identifies $23.4 billion of coal investment by China Development Bank and China ExIm abroad between 2014 and 2018.[35]
  • The American Enterprise Institute’s China Global Investment Tracker identifies $23.5 billion of coal investments and $36.4 billion of coal contracts by Chinese entities abroad between 2014 and July 2019.[36]
  • Global Energy Monitor finds that Chinese public financial institutions were supporting roughly 27 GW of coal projects abroad as of November 2018, with another 24 GW in the pipeline as of that date.[37]
  • Natural Resources Defense Council maintains databases of coal projects financed by G20 countries (including China).[38]

China’s state-owned policy banks provide substantially more support for coal-fired power plants abroad than any other public financial institutions.

  • As of early 2019, China’s state-owned policy banks were supporting roughly 44 GW of coal-fired power plants in the development pipeline abroad. South Korean financial institutions were supporting roughly 14 GW and Japanese financial institutions were supporting roughly 10 GW.[39]
  • From 2013–2018, China’s state-owned policy banks supported roughly 27 GW of coal-fired power plants abroad. Japanese financial institutions supported roughly 20 GW and South Korean financial institutions supported roughly 8.5 GW.[40]
  • Multilateral development banks and export credit agencies in North America and Europe have rules that either prohibit or very strictly limit financing of coal-fired power plants.[41]

Decisions concerning the type of technology used in coal power plants (subcritical, supercritical or ultra-supercritical) are left to host governments under the Belt and Road Initiative. Chinese government policies neither require nor provide incentives for more efficient coal power technologies in Belt and Road projects. IEFFA found that, as of early 2019, 38% of the coal-fired power plant capacity under development around the world with Chinese support used ultra-supercritical technology, 35% used supercritical and 23% used subcritical.[42]

Oil and Gas

China is the world’s largest importer of oil and natural gas. In part due to energy security concerns, Chinese government policies have long encouraged China’s large state-owned large oil companies, related service companies and financial institutions to invest in oil and gas projects abroad. These businesses have extensive investments and operations in upstream and midstream oil and gas operations around the world.

Chinese investment in oil and gas operations abroad is enormous.

  • State-owned enterprises owned by the Chinese central government have participated in more than 60 oil and gas projects in over 20 countries since 2013, according to SASAC.[43]
  • The 2019 WRI/Boston University study found over $100 billion of syndicated loans for oil, gas and petrochemical projects abroad between 2014 and 2017.[44]
  • The American Enterprise Institute’s China Global Investment Tracker identifies $54 billion of oil and gas investments and $56 billion of oil and gas contracts by Chinese entities abroad between 2014 and July 2019.[45]
  • Boston University’s China Global Energy Finance database identifies $62 billion of financing from China Development and China ExIm for oil and gas sector projects between 2014 and 2018.
  • The IEA found that Chinese national oil companies invested US$7.3 billion in production rights in 26 oil fields in nine Asian countries in 2017.[46]

China National Petroleum Company (CNPC), one of three large Chinese state-owned oil companies, is a member of the Oil and Gas Climate Initiative —“a voluntary CEO-led initiative taking practical actions on climate change.”[47]

Hydropower

Chinese banks and companies have played a significant role in hydropower construction abroad.

  • In Southeast Asia, Chinese entities have helped build more than 135 hydropower dams with 65 GW of capacity.[48]
  • The American Enterprise Institute’s China Global Investment Tracker identifies $22 billion of hydropower investments and $46 billion of hydropower contracts by Chinese entities abroad between 2014 and July 2019.[49]
  • The IEA identified 10 GW of hydropower capacity coming online with Chinese support in non-OECD Asia between 2013 and 2022.[50]
  • Boston University’s database identifies $21.9 billion of hydropower projects supported by China Development Bank and China ExIm between 2014 and 2018.[51]

These dams have been controversial. Although hydropower is a low-carbon power supply, it can have serious adverse impacts on local ecosystems. Chinese-financed hydropower projects in Mongolia, the Democratic Republic of the Congo, Indonesia and the Mekong Basin have been criticized for causing serious environmental damage.[52]

At the Second Belt and Road Summit in April 2019, China’s Ministry of Water Resources signed an MOU with the United Nations Industrial Development Organization (UNIDO) to promote small hydropower development in Belt and Road countries.[53]

Solar and Wind Power

Solar and wind power projects are a small but growing part of the Belt and Road Initiative.

  • A 2019 Greenpeace study found Chinese equity investment in 1.7 GW of installed solar and wind power projects abroad as of the end of 2018, with another 10.8 GW in the pipeline.[54]
  • A 2019 Natural Resources Defense Council study found $5.5 billion in loans for renewable energy projects from Chinese policy banks and commercial banks between 2014 and 2019.”[55]
  • A 2018 World Resources Institute/Boston University study found roughly $3 billion in syndicated loans by Chinese banks for solar and wind power projects between 2014 and 2017 (out of almost $130 billion in such loans for energy projects more broadly). The study also found roughly $2.4 billion of solar and wind power financing by China Development and China ExIm during this period (out of roughly $45 billion of total energy sector lending). It identified roughly $8 billion of solar and wind power investments by Chinese nonfinancial companies (almost all privately owned).[56]
  • A 2019 IEA study found 3.1 GW of Chinese solar and wind power projects in non-OECD Asia solar from 2013–2022.[57]

Chinese banks and companies are supporting several large, high-profile renewable energy projects around the world.

  • In Saudi Arabia, Shanghai Electric and ACWA Power are building a 950 MW concentrated solar power plant—the largest in the world.[58]
  • In Argentina, China Development Bank and China Export-Import Bank are financing construction of a 500 MW solar PV plant—the largest in Latin America.[59]
  • In Kazakhstan, China Power International built a 100 MW wind power project—the largest in Central Asia. The project opened in July 2019.[60]

The solar and wind power potential in Belt and Road countries is huge. The solar and wind resources in many BRI countries are enormous, domestic targets encourage deployment and many countries have made pledges to increase renewable power deployment as part of the UN Framework Convention on Climate Change (UNFCCC) process.[61]

  • A recent Harvard University study found that the projected power demand in BRI countries in 2030 could be met with 3.7% of the solar energy that reaches those countries.[62]
  • A Natural Resources Defense Council study found that the renewable energy capacity of BRI countries could reach 644 GW in 2030, based on those countries’ domestic renewable energy targets.[63]
  • The WRI/BU study found 327 GW of new renewable energy capacity would be needed by 2030 to meet the commitments of 31 BRI countries in their Nationally Determined Contributions submitted to the UNFCCC.[64]

References

[17] David Bénazéraf et al., Chinese Companies Energy Activities in Emerging Asia, International Energy Agency (April 2019) at pp. 2 and 4.

[18] Lihuan Zhou et al., Moving The Green Belt And Road Initiative: From Words To Actions, World Resources Institute/Boston University Working Paper (2018).

[19] “Central enterprises undertake 3116 projects along the “Belt and Road,” State-owned Assets Supervision and Administration Commission (October 31, 2018); James Suokas, “Chinese state enterprises undertake over 3,100 Belt and Road projects,” GB Times (October 31, 2018); Wang Yajie, “SASAC unveiled the latest transcripts of the “One Belt, One Road” of central enterprises, with a total profit of over 100 billion,” eeo.com.cn (October 30, 2018).

[20] American Enterprise Institute, China Global Investment Tracker (accessed July 24, 2019).

[21] Global Development Policy Center, Boston University, China’s Global Energy Finance (accessed July 27, 2019).

[22] Mercator Institute for China Studies, Belt and Road Tracker (accessed July 27, 2019) Thomas Eder and Jacob Mardell, “Powering the Belt and Road,” Mercator Institute for China Studies (June 27, 2019).

[23] Center for Strategic and International Studies, Reconnecting Asia Database—Belt and Road (accessed July 27, 2019).

[24] Global Energy Monitor, Global Coal Finance Tracker (accessed August 7, 2019).

[25] See Han Chen, “Greener Power Projects for the Belt & Road Initiative,” Natural Resources Defense Council (April 22, 2019);  Han Chen, “Carbon Trap: How International Coal Finance Undermines the Paris Agreement,” Natural Resources Defense Council (November 14, 2016).

[26] East-West Institute, BRI Projects Database (accessed August 10, 2019).

[27] Chinese Academy of Social Sciences, Belt and Road Database (accessed August 10, 2019).

[28] Xihua News, Xinhua Silk Road Database (accessed August 10, 2019).

[29] State Council, Action plan on the Belt and Road Initiative (March 30, 2015) at part IV (Unimpeded trade).

[30] “Belt and Road Energy Partnership inaugurated in Beijing,” Xinhua (April 26, 2019).

[31] “Lanao Kauswagan power station,” SourceWatch (July 19, 2019); “Congratulations Pakistan: Thar coal plant starts producing electricity,” Global Village Space (March 19, 2019); “GCM and POWERCHINA Inks US$4bn Power Deal,” GCM Resources (January 17, 2019); “Construction Resumes on $1.5 Billion Zimbabwe Power Project,” POWER Magazine (March 3, 2019); Ashfaq Ahmed, “Pakistan opens its first coal power plant in the most backward area of Thar,” Gulf News (Aril 10, 2019); Dana Ullman, “When Coal Comes to Paradise,” Foreign Policy (June 9, 2019); Dusan Stojanovic, “China’s Spending Influence in Eastern Europe worries West,” AP News (April 10, 2019); Gary Sands, “How China’s Belt and Road Initiative could lead Vietnam away from renewable energy,” South China Morning Post (June 11, 2019); Jonathan Watts, “Belt and Road summit puts spotlight on Chinese coal funding,” The Guardian (April 25, 2019); Karl Mathiesen, “China scrubs its coal projects from ‘world heritage in danger’ in decision,” Climate Home News (May 7, 2019); Oliver Griffin, “Ncondezi Energy Shares Rise on Agreement With CMEC, General Electric's Swiss Unit,” Morningstar (July 23, 2019); Rangga Prakoso, “Lontar Extension PLTU Operates in September,” Berita Satu (March 29, 2019); Michael Lelyveld, “China’s Belt And Road Initiative Blackened By Coal,” Eurasia Review (February 1, 2019).

[32] Christine Shearer et al., “China at a Crossroads,” Institute for Energy Economics and Financial Analysis (January 2019).

[33] David Bénazéraf et al., Chinese Companies Energy Activities in Emerging Asia, International Energy Agency (April 2019).

[34] Ren Peng, Liu Chang and Zhang Liwen, “China’s Involvement In Coal-Fired Power Projects Along The Belt And Road,” Global Environmental Institute (May 2017) at pp.1, 5 (106 new coal-fired power plants under construction or in planning pipeline as of May 2017).

[35] Global Development Policy Center, Boston University, China’s Global Energy Finance (accessed July 27, 2019).

[36] American Enterprise Institute, China Global Investment Tracker (accessed July 24, 2019).

[37] Global Energy Monitor, Global Coal Finance Tracker (accessed August 7, 2019).

[38] See Han Chen, “Carbon Trap: How International Coal Finance Undermines the Paris Agreement,” Natural Resources Defense Council (November 14, 2016).

[39] Christine Shearer et al., “China at a Crossroads,” Institute for Energy Economics and Financial Analysis (January 2019) at p.3; Han Chen, “The Questionable Future of Overseas Coal Investments,” Natural Resources Defense Council (November 27, 2018).

[40] Han Chen, “The Questionable Future of Overseas Coal Investments," Natural Resources Defense Council (November 27, 2018). See Christine Shearer et al., “China at a Crossroads,” Institute for Energy Economics and Financial Analysis (January 2019) at p.4 (“From 2013 to 2016, the five biggest Group of Twenty (G20) coal plant financiers were located in China, totaling US$15 billion in financing.”)

[41] Paul Baruya, International finance for coal-fired power plants, International Energy Agency (April 2017); “World Bank pulls out of Kosovo coal power plant project,” Reuters (October 10, 2018); Tim Buckley, Over 100 Global Financial Institutions Are Exiting Coal, With More to Come, Institute for Energy Economics and Financial Analysis (February 27, 2019).

[42] Christine Shearer et al., “China at a Crossroads,” Institute for Energy Economics and Financial Analysis (January 2019).

[43] “Central enterprises undertake 3116 projects along the “Belt and Road,” State-owned Assets Supervision and Administration Commission (October 31, 2018); James Suokas, “Chinese state enterprises undertake over 3,100 Belt and Road projects,” GB Times (October 31, 2018); Wang Yajie, “SASAC unveiled the latest transcripts of the “One Belt, One Road” of central enterprises, with a total profit of over 100 billion,” eeo.com.cn (October 30, 2018); “SASAC responds to the concerns of the Belt and Road project,” BHI.com.cn (March 11, 2019).

[44] Lihuan Zhou et al., Moving The Green Belt And Road Initiative: From Words To Actions, World Resources Institute/Boston University Working Paper (2018).

[45] American Enterprise Institute, China Global Investment Tracker (accessed July 24, 2019).

[46] David Bénazéraf et al., Chinese Companies Energy Activities in Emerging Asia, International Energy Agency (April 2019) at p.11.

[47] Oil and Gas Climate Initiative website (accessed August 10, 2019).

[48] Brian Eyler, “Can solar diplomacy green the Belt and Road?,” China Dialogue (January 2019) at p.7.

[49] American Enterprise Institute, China Global Investment Tracker (accessed July 24, 2019).

[50] David Bénazéraf et al., Chinese Companies Energy Activities in Emerging Asia, International Energy Agency (April 2019).

[51] Global Development Policy Center, Boston University, China’s Global Energy Finance (accessed August 10, 2019).

[52] Hu Min, Diego Montero, “Leveraging China's ‘Green Soft Power’ For Responsible Belt and Road Initiative Investment,” Forbes (May 14, 2019).

[53] Hou Liqiang, “China signs hydropower agreement with UN,” China Daily (April 26, 2019).

[54] Greenpeace, China’s Equity Investments in Overseas Coal, Wind, and Solar Energy Projects (July 29, 2019).

[55] Han Chen, “Greener Power Projects for the Belt & Road Initiative,” Natural Resources Defense Council (April 22, 2019) (see graph—“Chinese Project Loans for Renewables 2013–2018).

[56] Lihuan Zhou et al., Moving The Green Belt And Road Initiative: From Words To Actions, World Resources Institute/Boston University Working Paper (2018).

[57] David Bénazéraf et al., Chinese Companies Energy Activities in Emerging Asia, International Energy Agency (April 2019) at p.9.

[58] “ACWA, Shanghai Electric lead Dubai 950 MW Concentrated Solar Power -PV NOOR Energy 1 Project,” helioscsp.com (accessed August 21, 2019) .

[59] Hu Min and Diego Montero, “Leveraging China's ‘Green Soft Power’ For Responsible Belt and Road Initiative Investment,” Forbes (May 14, 2019).

[60] Wen Long Jie, “Central Asia's largest wind power investment project opened in Kazakhstan,” China News (July 18, 2019).

[61] See Brian Eyler, “Can solar diplomacy green the Belt and Road?,” China Dialogue (January 2019).

[62] Shi Chen et al., “The Potential of Photovoltaics to Power the Belt and Road Initiative,” Joule (June 27, 2019).

[63] Han Chen, “Greener Power Projects for the Belt & Road Initiative,” Natural Resources Defense Council (April 22, 2019);

[64] Lihuan Zhou et al., Moving The Green Belt And Road Initiative: From Words To Actions, World Resources Institute/Boston University Working Paper (2018).

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