China’s growing presence in Africa presents an opportunity for the continent to spearhead an energy revolution. However, despite rhetoric on green initiatives, Beijing must reverse nearly two decades of neglect towards green power investments in Africa, as highlighted by research from Boston University.
Since the turn of the century, China has solidified its position as Africa’s largest bilateral trading partner, backing this relationship with billions of dollars invested in infrastructure projects.
Yet, while President Xi Jinping announced a halt to new coal-fired power projects abroad and a commitment to supporting green energy development, the reality on the ground tells a different story.
According to a report from Boston University’s Global Development Policy Center and the African Economic Research Consortium, Chinese investment in Africa’s renewable energy sector has been disproportionately low.
From 2000 to 2022, only 2% of China’s $52 billion energy loans to Africa were directed towards renewables, with over 50% allocated to fossil fuels.
This imbalance raises concerns about China’s true commitment to Africa’s energy transition. While Chinese development finance institutions have primarily focused on investments in commodity extraction and electrification projects, renewable energy initiatives have received scant attention.
This is despite Africa boasting one of the highest potentials for green energy in the world.
The report underscores that Chinese lending often aligns with sectors that facilitate the export of oil and minerals back to China.
Notably, China’s Export-Import Bank finances several hydropower projects geared towards supporting metal extraction, highlighting a disconnect between China’s investment priorities and Africa’s energy needs.
Although Africa’s dependence on fossil fuels remains significant, there is growing momentum for transition. The report reveals that in 2022, fossil fuels accounted for a staggering 75% of total electricity generation and 90% of energy consumption in Africa.
To address this imbalance and capitalize on Africa’s renewable energy potential, China must recalibrate its investment strategies.
The report calls for China to leverage its economic prowess to bolster Africa’s energy access and transition. This includes increased investment in renewable energy projects, fostering technological transfer, and supporting capacity building initiatives.