From the Rosetta Stone to Magdala’s Ethiopian Treasures, the Parthenon’s Marbles to the Bust of Nefertiti, there is an endless list of artefacts ... that can be argued were illegally or unethically taken and put on display around the world far from the cultures that originated the works.
Between 2014 and 2020, various Chinese entities were involved in financing $160bn worth of coal-fired power plants outside of China, according to a new report published by the Green BRI Center at the International Institute of Green Finance in Beijing.
But it appears that Chinese authorities have had a change of heart regarding their support of coal power. Of those projects, “more than $65bn have either been shelved, mothballed or cancelled, with many more projects seeing delays in construction,” said the report’s author Christoph Nedopil Wang.
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In fact, of the 52 projects announced during that six-year period, only one has gone into operation, while 25 others have been postponed and eight have been cancelled outright.
Key highlights from the IIGF Green BRI Center’s new report on Chinese coal power financing
- Cost not conservation may be behind the shift: “The authors found that the loan spread for coal power plants has increased on average by 38%. This compares to a decrease of financing costs of 24% for offshore wind, 12% for onshore wind, and an increase of 7% for gas power plants. This has made financing coal power plants the most expensive of all power generation technologies.”
- Pricing in climate risk: “In addition to rising cost for coal and stronger competition through alternative energies, investors are also increasingly integrating climate risk into their decision-making. One of the most prominent risks is the introduction of carbon prices, which immediately affect the bottom-line of coal-fired power plants.”
Regardless of why the Chinese are backing away from supporting coal, whether it’s due to higher costs or a newfound awareness of the environmental impact, the fact is the trend is now well underway. And this could complicate one of the central narratives underpinning the G7’s new Build Back Better World initiative that aimed to present a cleaner, greener alternative to the Belt and Road.
US, European and Japanese stakeholders would be advised to study the new data so their proposition to developing countries reflects the emerging reality that China’s overseas energy financing isn’t as “dirty” as it used to be.
This article was first published in The China Africa Project.
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