Covid-19, funding concerns hit China’s belt and road projects

London think tank tracks last year’s progress of flagship Chinese investment plan, finds about 15 ran into trouble

Pandemic contributed to some, but not all, of the problems plaguing projects worth more than US$2.4 billion

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Zimbabwe’s Kunzvi Dam electricity project was one of about 15 under China’s Belt and Road Initiative to run into difficulties last year. Photo: Handout

Published: 6:00am, 7 Feb 2021Updated: 9:15am, 7 Feb 2021

About 15 Chinese Belt and Road Initiative projects worth more than US$2.4 billion ran into trouble last year, including a US$680 million electricity project in Zimbabwe, according to a think tank report.

The London-based Overseas Development Institute (ODI) said the overall figure could be higher, with some of the affected projects yet to be assigned a value, and attributed some – but not all – of the setbacks to delays caused by the Covid-19 pandemic.

According to the ODI report, China Export & Credit Insurance Corporation (Sinosure) was “greatly frustrated” by Zimbabwe’s failure to pay a US$10 million commitment fee for the Kunzvi Dam project, contracted to Sinohydro. The report said the Zimbabwean government was understood to already owe a substantial debt to Sinosure.

The study tracked belt and road projects between January and November last year and found several “affected by delays due to Covid-19, with Myanmar and Nigeria closing their borders early on to contain the virus, and Costa Rica likely as a result of mobility restrictions due to high numbers of infections”.

The report, titled “China navigates its Covid-19 recovery – outward investment appetite and implications for developing countries”, said other projects had failed to raise the necessary funding or backing. ODI defines projects as having run into trouble when they are cancelled, delayed, blocked, halted or withdrawn.

ODI director for global risks and resilience Rebecca Nadin, one of the report’s authors, said some high-profile projects in Tanzania and Nigeria had stalled or been cancelled for more traditional reasons of political risk, such as corruption and unrest, rather than the pandemic.