“Chinese firms struggle to fund renewables projects overseas”, 9 April 2020

Chinese renewable energy firms are booming at home but not overseas…

One important factor holding renewables back is financing… a report by Tsinghua University’s Research Centre for Green Finance Development and environmental thinktank Greenovation Hub, showed China’s overseas renewable projects face obstacles in the power markets of host nations, and that finance is difficult to obtain and expensive.

The report recommends that China helps BRI nations improve how they develop their renewables sectors, and that Chinese financial institutions gradually reduce support for coal power in those nations, freeing up resources to support Chinese renewables firms expanding overseas.

Building energy infrastructure is at the heart of the BRI. While the initiative has seen strong growth in China’s overseas investments in wind and solar power since its launch in 2013, fossil fuel projects still account for a big proportion of its energy projects…

At an online seminar held… by Tsinghua’s Research Centre for Green Finance Development and Greenovation Hub, Ma Jun, chair of the China Green Finance Commission, said that responding to climate change requires faster low-carbon investment in BRI nations, and that means large-scale funding from the financial system: “Financial institutions need to promote the implementation of the Green BRI through their services.”

The seminar was held to mark the publication of the new report, which examined 14 Chinese-invested overseas renewables projects and interviewed companies and financial institutions involved, to identify obstacles to renewables financing in BRI nations…

The report points out that: “Lower power prices in BRI nations due to intensive competition during project bidding, a lack of sovereign guarantees from host countries, and incomplete policies on take-up and pricing for renewable energy all impact on the ‘bankability’ of BRI renewables projects.”…

Experts at the seminar also hope China’s state-owned financial institutions will increase support for overseas renewable projects…

Bai Yunwen, director of Greenovation Hub, says that Chinese financial institutions need more encouragement from policymakers to support overseas renewables investments…

During the seminar, Ma Jun pointed out that China could encourage – or even require – financial institutions to carry out environmental stress testing on the make-up of its financing, encouraging them to increase green lending for BRI investment and creating a better financing environment.

[Also referred to Jinko Solar, Sinosure]