China has an extraordinary opportunity for an energy revolution in Africa, but first, it must overcome almost two decades of neglect regarding investment in green power there, research from Boston University showed on Tuesday.
Since the beginning of the century, Beijing has emerged as the largest bilateral trade partner on the African continent and financed billions in large infrastructure projects, according to Reuters.
China’s President Xi Jinping pledged three years ago, to combat climate change through the development of clean and low-carbon energy by not building new coal-fired power stations on foreign soil.
According to a report by the Global Development Policy Center at Boston University and the African Economic Research Consortium, despite that Africa has one of the world’s highest potential for renewable energy sources, there is still relatively low support from China in terms of lending and investment.
Lending for renewables, such as solar and wind, from China’s two main development finance institutions constituted just 2% of their $52 billion of energy loans from 2000 to 2022, while more than 50% is allocated to fossil fuels.
From 2000 to 2022, China’s two main development finance institutions provided only 2% of its $52 billion in energy loans for renewables, such as solar and wind power, while over 50% were devoted to fossil fuels.
“Given current economic challenges and future energy opportunities, China can play a role in contributing to Africa’s energy access and transition through trade, finance, and FDI (foreign direct investment),” the report said.
Investment in the extraction and export of commodities to China as well as electrification projects have been targeted by Chinese development financial institutions.
Many of the same sectors that produce oil and minerals shipped back to China have been targeted by Chinese lending.
In the report, fossil fuels represented about 75 % of Africa’s total electricity generation and approximately 90% of its energy consumption by 2022.
