"Is China’s Belt and Road Initiative on the brink of a green shift?" 19 September 19 2023

Developing countries have “huge interest” in Chinese companies and institutions helping with their green energy development, experts have told China Dialogue. But there has yet to be a surge of renewable energy projects finalised under the Belt and Road Initiative (BRI), China’s global infrastructure programme, they said...

Ditching coal (almost)

New coal-fired power projects have largely been halted, but a few projects slipped through the net because of “loopholes”, such as a 300 MW coal power plant in Pakistan and a 1.5-gigawatt (GW) plant in Indonesia...

The plant on Obi, an island in eastern Indonesia, dodged the axe because it was designed as an internal facility of an industrial park, instead of a standalone coal power project. On the other hand, the project in Gwadar, in south-western Pakistan, is not considered “new” by Chinese and Pakistani officials as it was first proposed in 2016 but repeatedly delayed.

Long renegotiation processes

Although many coal power projects have been called off, there has not been a wave of renewable projects coming in to fill the space, some experts noted...

One possible cause for the “vacuum” is the fact that President Xi’s one-line pledge did not specify how coal power projects in the pipeline should be dealt with...Other experts stated that it takes time for a government mandate to show impact on the ground...Other challenges include the lack of “supportive infrastructure” in some countries...

Renewable energy projects are often much smaller in scale than coal power plants. This means that Chinese energy investors, banks and developers need to apply new business logic and approaches to them...

‘Traffic light system’

Several Chinese and international organisations have published useful tools for evaluating the environmental impacts of BRI projects and guiding Chinese companies to invest in more sustainable ways. One of them is the Green Development Guidance for BRI projects...The guidance is also known as the “traffic light system” because it assesses BRI projects using colour-coded labels, based on their impacts on climate, ecology and the environment.

Asia Society, a non-profit organisation with offices in the US, Asia, Oceania and Europe, has developed a digital “toolkit” to help local communities and companies involved in the BRI ensure that their projects are “mutually beneficial, equitable, inclusive, and environmentally and socially sustainable”...

How to go further

Looking into the near future, experts listed several types of renewable projects they wanted to see more of under the BRI. “One is the local manufacturing of goods related to energy transition,” said Nedopil...Xiaojun underlined the importance of a growth in “capacity building” in BRI countries by Chinese companies, such as facilitating technological transfer and relocating some of their renewable supply chains there...