China Backs Coal Power in Africa, Renewables at Home

ADF STAFF

Despite recent setbacks, China continues to bank heavily on exporting coal-based power to Africa through its Belt and Road Initiative. And it does so even as the government promotes renewable energy at home.

Since 2000, the China Development Bank and the Export-Import Bank of China have funded $51.8 billion in coal projects globally, according to the Boston University Global Development Policy Center.

Of China’s 34 coal-fired power projects worldwide, 11 are in Africa. The list of countries includes Botswana, Kenya, Malawi, Mozambique, South Africa, Tanzania, Zambia and Zimbabwe. Plants are under construction in Malawi, Zambia and Zimbabwe. The rest are awaiting approvals or facing stiff opposition from residents. At least one appears to have been abandoned.

“China has enormous state-owned thermal-power manufacturing and engineering firms that rely on overseas deals to stay in business,” Lauri Myllyvirta, lead analyst for the Centre for Energy Research and Clean Air, told Bloomberg Quint.

Pollution, cheap natural gas and the falling cost of renewable energy have made coal an increasingly unpopular energy source. By depressing economic activity, the COVID-19 pandemic also reduced the demand for power overall. Energy analysts say Chinese projects create excess power capacity in a form that’s less flexible and more environmentally damaging than wind, solar or hydropower.

Financial institutions around the world shun coal-based power projects — except for those institutions in China. As a result, the four biggest banks financing coal-based power are Chinese.

China’s policy of exporting coal power has received a warm welcome in Southern and East Africa, where leaders see coal as a way to create more — and more reliable — electricity.

The Industrial and Commercial Bank of China is funding Zimbabwe’s $4.2 billion Sengwa power plant on Lake Kariba. In 2019, Zimbabwe approved the development of the ZhongXin power plant in Matabeleland. China’s Sinohydro also is expanding the Hwange power station in Zimbabwe by two-thirds by 2022.

In Botswana, China has supported several coal-fired power projects, including the Morupule B power plant, which opened in 2012. The plant has struggled with so many breakdowns, the government considered, for a time, selling it to the Chinese company that built it.

Botswana has Africa’s second-largest coal reserves. Lefoko Moagi, the country’s minister of mineral resources, green technology and energy security, sees coal as a “God-given natural resource” vital to the country’s economic development plan.

“We need to exploit it more cleanly for the benefit of our communities and the benefit of the nation,” he told Bloomberg Quint. “This is an opportunity for countries like China to come into this space.”

But lately, China’s plans to export coal power to Africa appear to be going up in smoke.

In Egypt, the government indefinitely shelved plans in early 2020 for its first coal-fired power station, the Chinese-funded Hamrawein power plant on the Red Sea, in favor of renewable sources.

Residents of Kenya’s historic Lamu Island stopped a Chinese-financed coal-fired power plant planned for environmentally sensitive land near their home, which is a United Nations World Heritage site and popular Indian Ocean tourist spot.

The power station would have been part of the ongoing Chinese-funded Lamu Port-South Sudan-Ethiopia Transport Corridor project that will bring a deep-water port, rail lines, oil pipelines and an oil refinery to Kenya’s north coast.

Activists fought the project for five years, saying it would harm their health and the local economy. In 2019, the Kenyan government suspended its permit. By November 2020, the project’s chief funder, the Industrial and Commercial Bank of China, had abandoned it.

A second Chinese-funded coal plant and associated mine planned for the Kitui region was approved in 2010, but it remains stalled by local opponents.

Lamu Island residents say Kenya should focus on green energy rather than sign on to outdated coal power. Between hydropower and solar power, renewables already produce 90% of the country’s electricity. Kenya also plans to develop geothermal power.

“They can do solar. They can do wind power,” activist Raya Famau Ahmed told Voice of America. “They can do tidal — we have the sea, which is the backbone of the people of Lamu.”