Analysis: Is China's overseas energy finance shifting towards sustainable practices?
"From Promise to Practice? Analyzing China’s Overseas Energy Finance and Opportunities for a Greener Horizon" 14 November 2023
...A recent update to the China’s Global Energy Finance (CGEF) Database, managed by the Boston University Global Development Policy Center, summarizes China’s overseas development finance for the energy sector... Notably, in 2022, there were no new energy sector loan commitments from these development finance institutions (DFIs) to public borrowers, marking a second consecutive year without fresh funds...
Amid ongoing domestic economic woes, China’s DFIs have refocused inward. In addition, heightened debt distress in borrowing nations has restricted the ability and interest in taking on new loans...
Suspensions and cancellations in China’s overseas electric power projects, driven in part by environmental pressures, could signal China’s — and the world’s — growing environmental and social consciousness...
China’s DFIs face unique challenges in the global energy sector, including the perceived risks of smaller, grid-connected projects in regions with underdeveloped infrastructure and increasing market competitiveness as renewable energy costs plummet...
...It is also important to note that Chinese companies have provided more support for overseas renewable energy than its DFIs, in the form of foreign direct investment amounting to 12 GW of installed renewable energy capacity...
China’s capacity to drive a green agenda is clear; yet, the road ahead is complex. China’s newly announced Green Investment and Finance Partnership (GIFP) promises a new platform to help develop green projects in partner countries with innovative financing mechanisms...