Chinese projects in Africa falling short on ESG implementation: report
- Much need for improvement in actual application of ESG considerations, co-author of report from Fudan University’s Fanhai International School of Finance says
- China is the largest investor in Africa, with Chinese financiers signing loan commitments worth US$160 billion with African governments and state-owned enterprises between 2000 and 2020
The study, conducted by the Boston University’s Global Development Policy (GDP) Center, the Fudan University Green Finance and Development Center, the South African Institute of International Affairs and LSE IDEAS, analysed five Chinese-financed infrastructure projects in Egypt, Nigeria and Ethiopia in two sectors – energy and industrial parks. China is the world’s largest investor in Africa.
The projects were evaluated for compliance with Chinese and local ESG requirements, particularly China’s “Traffic Light System” associated with the Green Development Guidance for Belt and Road Initiative (BRI) projects.
“In this unique international on-the-ground research with partners in China, USA and across Africa, it was striking to find a general awareness – and much need for improvement in actually applying ESG considerations.”
According to the report, in Egypt, the Tianjin Economic-Technological Development Area-Suez Special Economic Zone and Sinohydro’s Attaqa Hydroelectric Power Plant showed Chinese firms adhering to their host country’s minimum ESG standards, while also taking advantage of regulatory gaps around labour conditions and taxation.