Chinese policy banks shut out green energy despite President Xi Jinping’s 2021 pledge to developing countries, study says

In 2021, Chinese President Xi Jinping pledged to stop funding overseas coal power projects, and instead turn to financing more green and low-carbon energy projects. But a new study has found Chinese policy banks have yet to actually put their hands in their pockets.

Despite Xi’s promise to fund more renewable energy projects in developing countries, lenders including the Export-Import Bank of China and the China Development Bank (CDB) did not commit any finance to the energy sector in 2021 and 2022, researchers at the Boston University Global Development Policy Centre found.

In their new study about China’s global energy finance, the researchers said lending to overseas energy projects has been declining since 2016. They put this down to the impact of the Covid-19 pandemic, growing levels of debt distress in developing economies and a pivot within China’s financial institutions towards domestic economic growth.

But China would easily be able to increase renewable energy financing due to its technical prowess and financial muscle, the researchers noted.