Chinese cash funds African coal plant building despite environmental concerns

China is continuing to fund coal-fired power plants across Africa despite increasing concern about their environmental impact. This month a state-owned company said it would step up efforts to get a major project in Zimbabwe back on track after it was hit by delays caused by the Covid-19 pandemic. Late last month the construction giant Sinohydro flew 223 employees to southern Africa in what its parent company PowerChina described as a “bid to accelerate the progress” of the Hwange Power Plant expansion. The Chinese government is funding up to 85 per cent of the project through the Exim Bank of China. The scheme will increase the plant’s power capacity, and will provide the national grid with an additional 600 megawatts (MW). Last week, Guo Shaochun, the Chinese ambassador to Zimbabwe, said with the completion of the project “Zimbabwe’s power self-sufficiency capacity will be greatly improved, which is exactly what a country needs for its development and what practical cooperation should mean”. Green financing to help drive China’s 2060 push for carbon neutrality Zimbabwe is one of a number of countries on the continent, including South Africa, increasing their coal-fired power capacity despite concerns that it is a key driver of climate change. Besides Zimbabwe, Chinese lenders are funding the construction of at least eight coal-fired power plants with a combined capacity of 6.4 gigawatts (GW) in South Africa and four others producing 3.2GW, according to China’s Global Power Database compiled by the Global Development Policy Centre at Boston University. Work has also started on a 350MW plant in Morocco, and projects in Ghana and Malawi are also under consideration. In total, 11.55GW of coal-fired power plants, funded by Chinese lenders, are operating or under construction in Africa, according to the database. Kevin Gallagher, professor of global development policy at Boston University, said the increased use of coal was because South Africa had an abundant supply and strong local support for its use. “When countries ask China, given its abundance in coal power plant equipment and know-how, the finance comes quickly,” he said. But there is also growing resistance to its use, which has caused some schemes to be cancelled. Last year in Kenya, environmentalists won a legal challenge to stop the building of a US$2 billion coal-fired power plant, which was to be funded by the Industrial and Commercial Bank of China. The environmentalists argued that the project endangered a Unesco World Heritage Site in the coastal town of Lamu. In Egypt, where Chinese companies, Dongfang Electric Corp and Shanghai Electric Group, won a contract to construct a massive Hamrawein coal-fired plant, the US$4.2 billion project was halted indefinitely by the government amid an apparent rethink of its energy policy. Two Chinese companies – Zhongxin Coal Mining Group and Afrochine Smelting – were banned from prospecting for coal in the Hwange national park after environmentalists successfully challenged a government decision to grant them an exploration licence. China, EU step up to carbon cut challenge as US exits Paris climate deal China has pledged to be net carbon neutral by 2060 and has committed to cut emissions as part of its commitment under the Paris Agreement. It is also funding a number of hydropower projects across the continent and is pushing its “clean coal” technology. Some of the plants being built in South Africa use a form of “clean coal” technology known as supercritical, but the Hwange project in Zimbabwe uses subcritical technology, the least efficient form. “This is outdated technology for China, which is trying to phase out its subcritical plants and is primarily building ultra-supercritical coal plants,” said Christine Shearer, a coal programme director for the US-based energy research group Global Energy Monitor. She said all coal power plants emitted a lot of carbon dioxide, even the most “efficient” plants. The Intergovernmental Panel on Climate Change has called for the use of coal-fired power to be reduced by half to three-quarters by 2030 and phased out by 2050 to keep global warming below 2C. China’s goal to be carbon neutral by 2060 to cost US$15 trillion, report says Shearer said China was the biggest source of financing for coal projects in Africa, especially in Zimbabwe. “The world is moving away from coal and China has signalled it plans to follow, by pledging to be carbon-free by 2060. Some coal projects in emerging economies will be propped up by public largesse and subsidies over the next few years, but this will eventually give way to lower-cost solar and wind power,” she said. Zurich-based Han Chen, manager for international energy policy at the Natural Resources Defence Council, said any coal-fired power plant would still generate significant amounts of CO2. “Clean” coal sometimes referred to plants that used advanced pollution controls, Chen said, but at other times it only referred to plants that used slightly less coal than older plants and “the technology does not remove 100 per cent of dangerous pollutants like sulphur oxides (SOx) and nitrogen oxides (NOx)”. Fossil fuels, especially coal-powered plants, are losing favour with financiers and multinationals, which are facing increased scrutiny over their environmental impact. In recent months General Electric, Samsung, Siemens and Toshiba have all said they would no longer work on coal-fired projects. But Lauri Myllyvirta, the lead analyst at the Centre for Research on Energy and Clean Air, said China would continue to provide highly subsidised financing for overseas coal projects. “It would be in China’s interest to shift over investment into emission-free power generation, where Chinese companies are also the world’s largest suppliers and project developers,” he said. China was the world’s largest manufacturer of solar panels and wind turbines, and had invested more in green technology than any other country, he said. Thomas Hale, an associate professor in global public policy at the Blavatnik School of Government at the University of Oxford, said that since “power plants last for decades and take a very long time to recover their costs, any coal plant built today, no matter how efficient, risks becoming economically non-viable before it can make a return on investment”.