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New construction near the southern shores of Caribbean Lake is good news for Zimbabwe, whose collapsed economy and fragmented policies have deterred foreigners from making investments in the past 20 years.
However, the project is receiving mixed criticism, given the growing global consensus that financial institutions from Japan to the United States and Europe are avoiding investing in carbon projects. However, such a solution paves the way for Chinese companies (most of which are state-backed), despite the risk of undermining China’s international commitment to tackle climate change.
“We are very pleased that the project is progressing, especially now that the world’s leading banks are forced to cut funding for coal-fired power plants,” said Caleb Dengu, president of RioZim Energy, the company that manages the project. – This demonstrates China’s commitment to develop projects in Africa. The Chinese have an interest in strengthening their relationship. “
China really needs friends: Resentment over the coronavirus outbreak, first identified in China’s Wuhan, is raging above Beijing’s head. This is evidenced by a lack of confidence, exacerbated by last month’s racist attacks on Africans in the southern city of Guangzhou. Still, injecting money into coal only underscores China’s isolation by financing power plants that generate large amounts of greenhouse gases and other pollutants.
“The reputational risks associated with financing this type of project and the high probability that they will eventually be suspended should discourage [finansines institucijas] of participation, “said Tracey Davies, director of the Cape Town-based Just Share organization.
In fact, the Chinese government is still in 2017. It promised to “reject” its Overseas Construction Plan for the One-Lane Initiative, One-Way in order to promote environmentally friendly development in line with the goals of The United Nations. Last year, President Xi Jinping insisted that the program must be green and sustainable.
Caribbean lake
However, according to data collected by Greenpeace, Chinese companies and banks are financing at least 13 coal projects across the continent, and nine more are currently awaiting financing. According to the Boston University Global Development Policy Center, since 2000. The China Development Bank and the China Export-Import Bank only provided € 51.8 billion. dollar financing for coal projects worldwide.
“Despite promises to move to green and low-carbon energy, Chinese banks continue to support carbon energy projects,” said Lauri Myllyvirta, an analyst at the Center for Energy and Clean Air Research, an independent research institute. “There are large state-owned thermal energy engineering and generation companies in China that have to rely on overseas transactions to stay in business.”
President Xi, a signatory to the Paris Agreement, regularly mentions China’s commitment to multilateral efforts to combat climate change. But in reality, China is unlikely to give up coal power in the near future. Despite significant investment in renewable energy over the past decade, China continues to mine and produce approximately half of the world’s coal.
China has definitely made some progress. Foreign Minister Wang Yi noted at the UN Climate Summit in New York in September that by 2018 China has managed to exceed its CO2 reduction target. He drew the audience’s attention to the development of non-fossil fuels and afforestation and the fact that approximately 1.25 million tons were sold that year. electric cars. And yet now, in a bid to keep up with the pandemic recession, Beijing is beginning to ease restrictions on industrial pollution and cut subsidies for cleaner energy.
Green development in the poorest countries should not be a one-size-fits-all approach, but should be based on the country’s natural resources, says Yu Zirong, deputy director of the expert group at the Chinese Academy of International Trade and Economic Cooperation.
“It is impossible for countries with abundant carbon resources to be completely banned from using them,” said Yu, who spoke at the One-Lane, One-Way Forum in Beijing in October. “The key is to use them wisely.”
The same goes for Lefoko Moagi, Botswana’s Minister of Mineral Resources, Green Technologies and Energy Security. According to government data, Botswana has the largest coal reserves in Africa after South Africa.
“The world is constantly looking at coal as a dirty mineral. Make no mistake: we all want a cleaner world. However, we believe that the abundant natural resources that God has given cannot be left alone. We need to use them more cleanly to the benefit of our communities and our nation, he said in an interview in February, “It opens up opportunities for countries like China.”
China’s willingness to invest is a rare achievement for Zimbabwe, which currently cuts 18 hours a day because it does not produce enough electricity to meet demand and cannot afford adequate imports.
The project was originally led by London-based mining company Rio Tinto Group, the parent company of RioZim Ltd, which in turn owns Riozim Energy. The project was postponed due to the deterioration of Zimbabwe’s relations with its former colonizer, the United Kingdom. 2016 After the project was revived in 2007, General Electric Co. and the Blackstone Group LP division did not undertake any initial investigation, says company president C. Dengu.
Caribbean lake
© Zuma Press / Scanpix
Power Construction Corp. of China, a state-owned company also known as PowerChina, has pledged to cooperate in the first phase of the Sengwa power plant, which will see the construction of a 700-megawatt generating plant, a pipeline to supply water from the Caribbean dam and power lines. The total value of the project is 1,200 million. The financing is expected to be provided by the Industrial and Commercial Bank of China, and China Export and Credit Insurance Corp., or Sinosure, is expected to provide the necessary risk protection for the country, Dengu said. Both companies are owned by the Chinese government.
ICBC and Sinosure did not answer our repeated calls. PowerChina noted that its overseas coal projects will use the most efficient technologies to reduce emissions and comply with local environmental regulations and standards, while ensuring a stable and cheap supply of electricity to project developing countries.
An agreement for the rest of the project was signed last month, which will add another 2,100 megawatts and cost an additional $ 3 billion. dollars China’s state-owned Gezhouba Group will develop the project and lead the fundraiser, Dengu said. The company did not respond to our calls and emails. an email request with a request to comment.
“The Chinese are looking for new business opportunities,” said Dengu. “We bring market knowledge and management skills, they bring finance and technology.”
In fact, Rio Energy had no choice. European banks are no longer financing coal projects, and over the past year, South Africa’s largest banks have also pledged to cut their carbon funds in response to pressure from shareholders. Morgan Stanley and Citigroup Inc. are also reducing or suspending funding for coal-related projects.
Although the Zimbabwe project is small among those considered by Chinese companies, it is not the largest. PowerChina has signed a memorandum of understanding with the South African provincial government of Limpopo to build a power plant of at least 3,000 megawatts at a cost of $ 4.5 billion. Dollars
Not all projects are welcomed by local communities with outstretched hands.
Sengwa will take water from the Caribbean, a reservoir that is already so depleted by recurring droughts attributable to climate change that its hydro turbines are operating at low capacity. The South African government is threatened with a lawsuit because the country’s coal-fired power plants cause the most air pollution in the world.
“It is an endangered industry,” said Han Chen, head of the international energy policy program of the New York-based National Defense Council. “It is not surprising that companies are looking for places where environmental standards remain low to use more polluting equipment that is cheaper to operate.”
At a time when banks in other countries, including Japan and South Korea, are moving away from coal projects, they increasingly have to seek support in China.
“Chinese banks are essentially alone in funding all the new coal-fired power plants, both domestically and globally,” said Christine Shearer, director of the Global Energy Monitor’s carbon program.
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