In CGSP’s first-ever China–Africa Energy Forum, Managing Editor Cobus van Staden hosts three leading experts to explore how Chinese finance, technology, and policy are transforming Africa’s power landscape:
- Frangton Chiyemura
Lecturer in International Development, Open University - Wei Shen
Research Fellow, Institute for Development Studies - Adjekai Adjei
Non-Resident Fellow for Africa, The China-Global South Project
Drawing on CGSP’s new China–Africa Energy Tracker and a groundbreaking report “Powering Africa: China’s Expanding Role in the Continent’s Energy Future,” the panel examines $33 billion in Chinese energy investments across 30 African countries, the rise of renewables, and the shift from “big infrastructure” to “small and beautiful” projects.
🔹 00:00 Introduction — Launch of CGSP’s China–Africa Energy Forum & Energy Tracker
🔹 05:20 China’s $33B in African power projects: scope and strategy
🔹 14:10 The pivot to renewables: hydropower, solar, and green innovation
🔹 26:45 Financing models, data transparency, and technology transfer
🔹 39:10 Balancing opportunity and dependency in the energy transition
🔹 50:00 Mining, electrification, and the “small and beautiful” Belt and Road
🔹 1:02:00 Audience Q&A — policy, finance, and the future of Africa’s grids
Originally broadcast live on YouTube, LinkedIn, X, and Facebook, this conversation kicks off CGSP’s new global discussion series on China’s role in the Global South.
About Frangton Chiyemura, Adjekai Adjei, and Wei Shen:
Frangton Chiyemura is a Lecturer in International Development at the School of Social Sciences and Global Studies at The Open University, UK. His research focuses on the role of China in Africa’s development trajectories and is particularly interested in Chinese financing and development of ‘critical infrastructure’ (renewable energy, space infrastructure, telecommunications, transport and, recently, the Belt and Road Initiative) in African countries and how such projects contribute to inclusive growth and structural economic transformation.
Adjekai Adjei is a non-resident fellow for Africa at The China-Global South Project. Her research considers the role of Chinese investment in power generation projects in sub-Saharan Africa. She is an admitted attorney of the High Court of South Africa and specializes in corporate and commercial law. Adjekai has experience in several aspects of commercial legal practice, including banking and finance transactions, energy litigation, and corporate transactions. Adjekai was an associate designate at Cliffe Dekker Hofmeyr and an Associate at Webber Wentzel.
Wei Shen is a political economist who has worked for development finance agencies in China for over ten years. His research interest has mainly focused on low-carbon development and energy transition in China and its impact on international development. As a political economist, he is working on interdisciplinary issues around central-local and state-business relations to promote green industries such as renewable energy, carbon markets, and climate finance in China. Wei is also interested in the social-economic impacts of low-carbon transition, particularly on the most vulnerable and disadvantaged groups, and challenges in achieving a just transition in China. In addition to domestic challenges, he is also examining the global impacts of China’s low-carbon development, focusing on South-South cooperation in the energy and climate-related sectors.
Show Notes:
- The China-Global South Project: Powering Africa: China’s Expanding Role in the Continent’s Energy Future by Frangton Chiyemura
- The China-Global South Project: Interactive China-Africa Energy Tracker
- Boston University Global Development Policy Center: Unlocking Africa’s Clean Energy Potential With Prefeasibility Funding by Tsitsi Musasike, Jiaqi Lu, Adjekai Adjei, and Kevin P. Gallagher
Transcript:
COBUS VAN STADEN: Today, I’m delighted to welcome you to the first-ever CGSP China Africa Energy Forum. We’re turning the old boring webinar into something a little bit more dynamic and fun. So we’re live right now on YouTube, LinkedIn X, and Facebook.
And we’re also broadcasting to regular listeners of our podcast on Spotify, Apple and other platforms. We’ll receive input from all over the world. And we plan to turn this into an ongoing discussion series, bringing you insights you can’t get anywhere else.
Today, we’re talking about one of the biggest issues in China-Africa relations, electricity. So Africa has a huge electricity demand. Almost half of Africans lack access to a stable electricity supply.
Meanwhile, China is now the world’s first electro-state. It produces about 80% of the world’s solar components. So if you have solar energy, there’s a very, very high chance it’s Chinese.
And it is also a leader in most other electricity sectors worldwide. So today’s Energy Forum launches CGSP’s China Africa Energy Cracker. This is an interactive map that provides the most comprehensive public data on China’s involvement in Africa’s energy sector.
It gives you a unique view of the entire African power landscape and China’s role in it. And you’ll see it’s a very complicated role. So there’s a link to this map.
It’s not behind a paywall on our site; we’ll give you a link in the show notes. And so you can go play around with that map. It’s really fascinating.
To help get you into what this data means, we also produced a framing paper by Frangton Chiyemura, a major voice in the Africa-China field and a lecturer in international development at the Open University in Milton Keynes in the UK. So Frangton will start us off today, introducing the China Africa Energy Tracker and his paper. We’ll then move on to comments from two key experts.
Wei Shen is a research fellow at the Institute for Development Studies and a leading global expert on China’s involvement in African electrification. Ajika Adjei is an expert on African energy finance and a CGSP research fellow focusing on Africa. She published an amazing series of articles for us unpacking the issues that face Africa’s power sector and will include links to those in the show notes as well.
Before we start, please remember we are live and we would love your questions and comments. So please post questions and comments in the chat on YouTube, on LinkedIn, or tag at ChinaGSProject on X. And we’ll try to draw in these comments and respond to them live.
So without any further ado, I’m handing over to Frangton. Please go ahead, Frangton.
FRANGTON CHIYEMURA: Good morning, or good afternoon, or good evening, depending on where you are. Well, thanks a lot, Corvus, for the kind introduction. And it’s also such a great honor to be joined by colleagues Wei and Ajika on this very important topic that we hold dearly.
I wanted to briefly reflect on this report that examines China’s role in Africa’s energy sector. And this is coming from a report that was commissioned by the Global China Project. And it tries to really look at the role of China in different African countries, looking specifically at even the types of sectors or the different energy resources that the Chinese have been involved in.
So what I wanted to start with, maybe, is to give you an overview —kind of a broad one—in terms of strategic insights, if that’s helpful. So the first thing really that we see from this report, which, as Corvus has said, is going to share with you, is that there is an increasing move towards what we would refer to as strategic engagement from the Chinese towards the Africans, in which we see the Chinese investments are increasing towards Africa’s energy sector. And based on the data that we used in the report, we can tell at least about $33 billion was actually invested in almost 32 gigawatt power generation projects across 30 African countries.
What this really tells us specifically is that China is now an indispensable player in Africa’s energy sector. And then the second aspect I want to highlight, which is also covered widely in the report, is the focus on renewable energy. So of the about 84 projects that we identified in the report, I wanted to bring to attention that the majority of those projects are actually renewable energy.
And that also goes with the kind of regional focus of these projects within the 30 African countries that we looked at. So, for instance, the report shows that Southern Africa, in this case, has the highest number of Chinese projects that were commissioned at least between 2020 and 2024. What’s interesting specifically about this renewable energy focus, we see that hydropower still remains the dominant energy source for which the Chinese are actively engaged in Africa.
And this is followed by solar and other renewable energy portfolios in Africa. What this really shows us is that the way the Chinese are engaging in Africa’s energy sector responds much to Africa’s energy needs, which kind of shifts the paradigm from other, if you want, traditional development players, where the focus has been what is the interest of this investment or partner or in this donor or these agents, which then tries to push those interests into respective African countries.
This is a bit interesting in this case, because China is always responding to African countries’ needs, particularly in the energy sector. And another aspect covered in the report is the investment models and implementation modalities of these projects. So what we see, for instance, is that China is becoming increasingly sophisticated, particularly in the financing mechanisms and structures of these projects.
So, from one end, we can see that China is developing projects that are not funded by Chinese funders or projects that do not have Chinese funding. And on the other hand, we are seeing that the Chinese are also developing projects that are also funded by Chinese funding sources. And thirdly, we are seeing that the Chinese, as well, are supplying technology to some of these projects, which are not even funded by Chinese sources.
So what this means, really, is demonstrating the flexibility of Chinese entities, especially in the energy sector, as they can easily adapt to different financing and implementation modalities. But what’s key, and I want to emphasize this point here, is that at least as per the report, we see that there is a kind of correlation between countries that tend to have more natural resources with Chinese energy funding or energy projects in Africa. So, for instance, in the report, you see a high concentration of Chinese projects in southern Africa, coming from Zimbabwe and Angola, which are very rich in natural resources.
So we can begin to draw some conclusions: indeed, there is a strong natural resource infrastructure connection in these investment decisions. And then finally, one thing that I would like to bring to your attention as well is that although China is now an indispensable player in Africa’s energy sector, there are challenges like in any other corporation really. And of course, these challenges really requires African countries to be proactive, particularly in ensuring that the projects align with national development priorities.
COBUS VAN STADEN: Thank you, Frangton. Adjekai, I was wondering, you know, kind of how this research and these reports kind of made you think about this issue of how Africa finances its electricity transition.
ADJEKAI ADJEI: Thank you. Thanks so much, Cobus, and I think I’ll start off with the formalities just to say thank you for having me. It’s really such a pleasure to be here at CGSP’s inaugural Energy Forum, and also just a huge congratulations to your team for putting this together.
Also, such a pleasure to share the stage with such brilliant minds. So I really love your question around how this tracker and, you know, the report that’s been produced really made me think about Chinese investment in Africa’s energy sector. I’ll start with just a quick backstory to set the scene.
So when I initially started the PhD and I submitted the proposal in that first year, it received really good reviews that highlighted how important and timely the topic was. But the examiners really added a clear warning: I might not be able to finish because the necessary data wasn’t available, which would prevent me from conducting rigorous, in-depth research, essentially. And they weren’t entirely wrong.
I just had to set up, you know, really on a quest to find this data. Traveling from east to west, southern Africa, visiting, you know, Boston University, meeting up with Wei Shen in Beijing. And that’s actually even how I got in contact with CGSP.
So, looking for this data took me on a search around the world. And even during that search, you know, every African government official that I spoke to had really agreed to take part in the research and be interviewed, not because they had all the answers, but because they were seeking answers. They wanted to understand how these projects, which were essentially Chinese-backed, were working in other African countries.
So, honestly, the appetite for reliable information on this topic is so unmistakable. But tools like this energy tracker are so crucial for providing obvious, usable evidence for governments, researchers, developers, and financiers, so projects can be put together in the most viable way possible. And I think I’ll just focus on essentially the transparency and the data aspects on this.
Really, I think the two key takeaways as I worked with the tracker and from my experience in just conducting research in this field are that the tracker turns visibility into negotiating power. So the simple thing is once you have clear facts, clear information, you can actually work and negotiate better. It gives, the tracker gives, as we can see, I don’t know who’s controlling it at the back there, but you can see it really, it’s a living map as to what’s being built, who’s doing the building, where is it, what technologies are there.
It helps you spot clusters. It helps you pick up patterns. Where’s the solar?
Who’s delivering? And I think all this information is so important to African governments and ministries to allow them to plan properly. It’s important to developers to allow them to structure, you know, bankable pipelines of projects.
And it’s also very important to financiers to have this kind of information to allow them to price risk. So essentially, I think, you know, my big takeaway is like having information such as this allows people to really negotiate with a map and not a blindfold. And that alone pays off.
I think my second point is that it really speaks to the same sort of issue around the flip side, which are the gaps that we generally find in the field. And it’s nice to see how this tracker essentially fills in the gaps around unclear financing terms, timelines, and so on. So, yeah, I think just really focusing on the data, tools like this, research papers like the ones Frangton has put together are so vital for providing information that generally isn’t in the public domain for various reasons.
And just collating it into such a space really helps take discussions and projects forward. And I think that’s critical on a continent with such large energy access gaps.
COBUS VAN STADEN: Wei, one of the things that surprised me in looking at the data is the complexity of China’s role, you know, that like and how Chinese different Chinese actors show up on so many different levels, you know, in this landscape. So what did you draw from the data?
WEI SHEN: Oh, thank you so much for inviting me to such an important event. And also a big congratulations to CGSP colleagues for this database. I’m already a very zealous user in the past two days.
I think I’m spending at least two or three hours a day on this, checking and cross-checking the data with my paper, and in Guinea and the DRC to see if there’s anything wrong with my previous data, and so on. So this is a vital and useful instrument for researchers like me. I think most researchers in the field would agree with me that this is exactly what we need, filling many gaps, as I already mentioned.
And also big congratulations to Frangton for this report, and also a very good analysis and also important insights generated from this report, which can serve as a basis for this discussion. And to answer the question about the diversity of the Chinese players and also the diversity of the projects. And we can talk about the actors, probably at a later stage.
But I think the biggest impression for me is the notable and decisive shift from the conventional fossil fuel investments to renewable energy projects, which show several things. First is the unparalleled technical supremacy from the Chinese actors in the hydropower sector, particularly in the hydropower sector and solar panel sector, but also a diversity of project types, different energy sources from wind, geothermal, wave, and so on. This is absolutely exciting and different from what we observed only, I think, five or 10 years ago.
And I think that really drives the price down. I mean, if you look at the countries hosting these projects, it would be amazing to see such a variety of investment types that are actually affordable and operational across so many countries, many of which are low-income. So that’s a really amazing change, I observed.
And also, you can see President Xi’s announcement in 2021 at the UN General Assembly to stop financing coal. Only four years ago, I think that such kind of a top-down announcement is really taking effect for the Chinese actors to really have a pivot towards renewables in the last few years. That’s one observation.
And the other, talking about complexity or diversity, is the shift from very large-scale projects to an increasingly larger number of small projects. Five megawatts, 10 megawatts, I think a significant, if not the majority, of the projects are under 50 megawatts now. So that shows that another kind of political slogan, small and beautiful, small and smart, is no longer a slogan.
It’s really taking effect on the ground. There are different, of course, drives behind it. And there’s probably a risk concern in it because the Chinese investors, an increasing number of investors, are kind of shifting away from the traditional state utility, this type of lending, or trying to stay away from the sovereign credit risks and so on.
So they will focus more on a decentralized system and on a smaller scale. So that’s another very interesting finding. And the third is that, because of that, coming back to the diversity and complexity of the picture, in terms of financing, we probably have two parallel tracks.
Even between hydro and solar, we see very conventional: this kind of EPC-plus-financing model provided by China Ex-Im or China Development Bank still works for many hydro projects. But, again, excitingly, for renewables, we have more innovative financial models that involve not just policy banks, but also Chinese and non-Chinese financial institutions, sometimes MDBs, sometimes even commercial banks, and sometimes more creative solutions like Green Bonds and so on. So these are really the exciting but more complex picture and the landscape that we are getting from this database.
Yeah, I will stop here and then we can discuss other topics if you like. But that’s a very exciting landscape we’re talking about today.
COBUS VAN STADEN: Yeah, I also think so. Frangton, as you pointed out, China is emerging as a really unique partner, I think, in this field. And so in this context, which kinds of opportunities and pitfalls do you think African decision makers should keep in mind?
FRANGTON CHIYEMURA: Again, it’s all about also the current moment that we are in, because we understand this geopolitical competition, as everyone is talking about. And some scholars are even considering it more like the second Cold War, really. So I think it’s really thinking about how African players make use of this opportunity?
Of course, I mean, it has its own challenges, so to speak. But then how can African countries, in this context, make use of this to leverage or contribute to greater bargaining power in their interactions with external development partners in Africa? So, of course, specifically looking at what the Chinese have been doing in Africa in its sector over the period of reports covered here, I think there are a few opportunities that I think can be possibly accelerated.
The first one is that China is still very much focused on infrastructure, hard infrastructure, so to speak. So that’s a clear signal opportunity that African countries can really tap into. This is, of course, a bit unique in that, for other traditional development partners for Africa, the focus has kind of shifted from hard infrastructure to soft infrastructure, so to speak.
So indeed, there is an opportunity here that the Chinese can contribute to, particularly in the context of this huge energy gap for African countries. And then the second thing really that we have to focus on here is that the scale of this infrastructure focus from the Chinese is quite massive, right? Scale either in terms of project capacity or in terms of financial contributions or financial commitments.
Similarly, with technological commitments as well coming from China to Africa, there is a massive, massive scale which indeed African countries should proactively ensure that this moment is not lost, particularly in developing the so much-needed energy resources in Africa. And then the third aspect that I want to bring to this discussion is also the ability of Chinese entities to implement these projects at such a pace. So as I said earlier on, I mean, if you to check in the report, you see that there are quite a number of projects which are not funded by the Chinese entities, but are developed by the Chinese entities.
So, in other words, the Chinese are increasingly seen as, you know, the best contractors or constructors for developing energy projects in Africa. So if you check, for instance, from the report, we see that about 79 out of the 84 projects we looked at were actually built by the Chinese, right? And in the remainder, some of those projects are actually not financed by the Chinese, but still a project that is commissioned by a non-Chinese, or in this case, a Western or non-traditional or traditional development partner.
But then the contract is awarded to a Chinese company or a Chinese institution. So there is increased confidence, if I can put it that way, in the capabilities of Chinese construction companies in developing projects in Africa. So clearly, this is an opportunity that African countries can tap into in developing their much-needed energy in Africa.
And then maybe rounding off in terms of the opportunities, there is this aspect of skills and technology transfer. And that also comes into play when we look at what the Chinese are doing. Of course, I mean, there are ongoing discussions about how much, and to what extent, these skills really transfer to African engineers or technical personnel involved in the project.
But at least when we look on the ground, we can see that the Chinese are doing a lot, particularly in transferring the technology, in transferring the skills. And we can see this, for instance, in terms of labor or employment patterns in some of these projects that the Chinese are involved. We see a localization rate of about 80 to 90 percent in most of these projects, which seems to suggest that the majority of people actually working on these projects are African.
Of course, I think as it goes without saying is that some of these really are actually going to low skills or mid skills. And then there is kind of a higher concentration of Chinese in terms of the management and more technical positions in this project. And this is something really that I think some African countries need to work on.
Now, switching this to more of the pitfalls here, Corvus, I think this is something that is also documented in the report that given the sheer volume of Chinese involvement in African countries, there is a possibility of deepening dependency, which basically means, for instance, in the case of Zambia, where we see about 11 projects totaling about four gigawatts actually being done by Chinese entities. Well, it’s a good thing that at least the Chinese are involved, but it also has possibilities of risks in the future in case disagreements arise around how these projects are actually developed.
And for instance, if you look at four gigawatts, that’s a massive addition, right? A massive one. What happens if things go south with some of these entities that are involved?
Would then limit the policy autonomy of the Zambians in this case? What are the implications in terms of other sustainability discussions that everyone is talking about, particularly in the context of energy development? And I think some of the more general end of one speaks about risks, really at the moment, the issue of environmental risks, issues of standards, and also issues, as I said earlier, around the specificities of the tech which is transferred and the skills which are transferred to African countries.
So these are broadly some of the things that African countries for now really have to kind of pay or focus on as China is increasing, depending its cooperation with Africa in the sector.
COBUS VAN STADEN: Wei, how do you think about these issues, particularly on the kind of pitfall side? Like, how does this calculus look from the perspective of the Chinese side?
WEI SHEN: Let’s start with the technology transfer, which is also my interest. I think the technology transfer is happening on the ground in different formats, in different forms that are sometimes not really captured by even the scholars and, practitioners and think tanks. And at the moment, I’ve visited many projects on site.
I see how the training programs are implemented by the Chinese companies, and I see the rising percentage of African employees in the project companies. But there are still challenges. For example, it is easier, a little bit easier to train labor intensive workers rather than managers and engineers and so on, which requires more sophisticated training programs, which sometimes is absent in the host countries.
So we need some of this kind of on the ground trainings and so on implemented by the Chinese companies only because of the need for the project implementation. But we also need an education, more systematic education programs within the host countries, which means that large scale investments need to be accompanied or need to be integrated better with aid programs provided by either by China or other bilateral or multilateral agencies. Yeah, I’m not sure if there’s any other specific aspects you would like to highlight Kobus.
Maybe you remind me, apart from technology transfer, is there any particular aspect?
COBUS VAN STADEN: I think that the broader issue of dependency is one that Frangton was also mentioning, and I was wondering what you think about that.
WEI SHEN: Zambia is a very unique case. It has a huge amount of mining investments that require some capital power solutions. That’s one of the reasons I think you see more projects than other places.
And also, there are large hydropower potentials that can be tapped. So there are one or two very large hydropower stations there in Zambia. So in general, it is wise for the host countries to put eggs in different baskets.
And so the question is that, given China’s kind of technical supremacy and their delivery supremacy, they can do whichever projects you want to do at whatever lower cost you can imagine, and also at whatever tight time frame these projects need to be done. So the competition, particularly for certain types of projects and particularly for the construction projects, the so-called EPC projects, is more often among Chinese companies rather than between Chinese companies and other foreign companies. But things are getting better because we see some countries like Kenya, they do have domestic EPC companies that are developing very fast.
So that is more or less like a pathway to diversify or to kind of de-risk from this over-concentration on Chinese construction companies. But again, it takes time, and it is more or less a balancing act for the host government: whether you want the cheapest project in the shortest time, or a strategic view we can discuss later. But it’s more or less like a balancing between price, time, and also the level of competitiveness in the market.
COBUS VAN STADEN: Adjekai, as you see, one of our listeners posed the question, raising this issue that Frangton Chen was also mentioning, that the close link between mining activity and electrification. So in a lot of cases, as we’ve seen in Zimbabwe, for example, some of these electricity projects are meant to drive mining and mineral refining. But then the question is also whether Africa is going to remain stuck in that kind of specific space or whether you, and I’d like to ask your opinion about that, whether you see opportunities for broader-based electrification, maybe hooked off of or adjacent to these big industrial projects?
ADJEKAI ADJEI: I think, you know, just looking at Africa’s power landscape, one reason that I would say is really driving this electrification of industrial kind of or like businesses mining is just because of how utilities, well, not just because, but one of the key driving factors is that utilities in the region are generally not so financially sustainable and viable. I think in sub-Saharan Africa, we have two financially viable utilities that essentially buy the power and sell it to the public. And so as a risk mitigation measure, a lot of companies, and I see this is probably what’s happening in the case where we see China funding a lot of mining activities, would be that companies are looking for the most financially viable model and, you know, funding mining activities, obviously because of the sale of the products, then makes the whole essentially chain, the whole chain of business quite successful. So I think that’s why the start of this is just a huge increase or, yeah, a focus has been on funding activities such as mining, because there is kind of a sustainable flow of finances to be able to pay for the development of the infrastructure. Essentially, they’re good clients, for lack of a better word.
And notwithstanding kind of the focus on these clients, I think nonetheless, it has an impact on these, on communities, right? So if we start with essentially funding mining operations, that would have an impact on the community more broadly and would essentially, in a sense, drive economic, you know, development within that community. So as that mining town is becoming more financially viable, has, you know, more buying power, I think there will be that ripple on effect.
So, I mean, looking at it from a more optimistic view, as much as it’s, you know, the goal is to provide access and we’re seeing access to everybody and we’re seeing a focus on businesses and mining, for example. I think there will be the ripple on effect where through financing and through electrifying businesses, we have the opportunity to financially empower citizens. And then that would have a ripple on effect to essentially say citizens might now be at a place where they’re able to better pay for electricity and hopefully management of our utilities gets better.
And so we just see that ripple on effect. But even in the work that I do, like my day to day, a lot of the work that we look at is around financing productive use activities, essentially to catalyze economic viability and to, you know, strengthen the economic strength of that community. So long story short, yes, there’s a focus on mining, there’s a focus on larger businesses for now.
But I think that in the end, it’s the hope that there would be the trickle down effect, just making communities have more buying power.
COBUS VAN STADEN: So we shared the reports and the tracker with a few experts in this field, and they sent us some questions. So the first one is from Mui Yang, who’s a senior energy analyst at Ember Energy, a very influential climate related research institution. We’re going to play the question, Ajika, I think maybe I’ll pose it to you.
But Wei and Frangton, please feel free to jump in if you’d like.
MUYI YANG SOUNDBITE: My name is Muyi Yang from Ember, a global energy think tank. First, I would like to congratulate you on the launch of this excellent special report on China-Africa energy engagement. It is very timely, substantive and very practical.
And the research presented in the report maps where momentum is building. And the report also identified very familiar issues affecting the bankability of renewable projects in many developing markets, like policy uncertainty, regulatory gaps, technical and system constraints. And we all recognize that unlocking large-scale finance, both domestic and international, depends on fixing this soft infrastructure side of the equation, not just deploying hardware.
So within this context, my question has two parts. First, how can Chinese stakeholders help build institutions supporting African host countries to put in place a credible policy framework, predictable regulation, and standardized contracts so that renewable projects get de-risked and scaled? Second, is there scope for North-South cooperation alongside China’s role, bringing in multilateral banks, OECD partners, and standard-setting bodies to accelerate this institution-building process in Africa?
And given the global North’s strength in institutional design and standards, how can we leverage those capabilities to shorten the learning curve? Thank you. And I look forward to the panel’s thoughts on these questions.
ADJEKAI ADJEI: All right, thank you. Those are such lovely, very interesting questions, and I think they are very, in a sense, interlinked. So, but I’ll start with the first one.
So how can China help build institutions? I think it’s a very, very important question. And I think there was a researcher who reached out for an interview about a month ago, essentially looking at the same question.
So from the projects that we’ve done, so currently we’re implementing an EU funded project. And with that project, what I’ve seen is that there’s a package for actually project implementation. And then there’s about.
Twenty percent or more of that financing actually put aside for technical assistance and to building, you know, institutional capacity. And from there, you know, we’re working with regulators essentially to get their licensing licensing processes to be more streamlined. We’re setting up IT platforms to make it easier for, you know, for investors to come in.
We’re setting up kind of training sessions to sensitize the public around how tariffs work, what goes into the tariff and just allow people to understand. And so I would say that looking at, you know, most of the Chinese backed projects that I’ve seen, there hasn’t been such a focus on the technical assistance aspect within implementing specific projects. Right.
So the most of the projects I’ve seen, a lot of the funding just goes to, you know, the EPC side of the project. So I think, you know, combining or adopting a model where you not only build the infrastructure, but you also work with the different agencies to essentially strengthen their processes would be very important. And I think that, you know, very nicely links to other question about if there is that opportunity for North-South collaboration in terms of strengthening institutions.
I definitely think that there is just seeing how the project that I spoke about earlier is being implemented. I think that there’s room for collaboration on from all three. So from the African host state perspective, one thing that we’ve really been focusing on is making sure that we carry the government along.
So as we’re working on, you know, these IT platforms to streamline processes, one of the things that we’ve done is that we really focus, for example, in the electricity sector, because that’s where the investment support, where the funding is going to. And we’d share this with the government regulator and they’d said, actually, we need our whole platform to be expanded to include our water regulation, for example. And that’s not something we initially thought about, but it would feed directly into essentially some of the work we do if we’re developing hydro.
So I think it’s very important once you ensure that the government voices are heard and carried along and not just because funding is being provided, you know, it means that the funder calls the shots. And then from the Chinese perspective, I think what’s very, very important in terms of, you know, collaboration within, if we say the triad of Chinese participants, Western participants and African governments, I think what’s important for Western governments to maybe pick up is kind of that flexibility and financing that China offers, which is very important in, you know, in the context of how African utilities and economies are set up, where they’re not as stable and maybe a bit more risky. I think that flexibility, that relationship building is very important. So there’s definitely that scope.
And I would say that looking, comparing and contrasting, you know, for example, Western finance project to the Chinese finance project, there really is more scope for China to drill down on the technical assistance. Having said that, I think that what we are seeing from China is technical assistance at a country to country level and not so much at project level. And that is still very important.
And so I know that there was projects, I think, Wei, we worked on this in a report we did previously, but there was a China, Zambia, South-South project where there was a big focus on technical assistance. And then I think the same happened with Ghana, where China essentially, the Ministry of Science and Technology helped Ghana essentially draft its renewable energy master plan. So not to say that there isn’t that technical assistance happening.
I think maybe it’s just not happening at a project level, more country to country. And that’s where we can maybe strengthen. But thank you, opening up, if there’s any other contributions.
COBUS VAN STADEN: Yeah. Frangton, go ahead. You mentioned you’d like to add something.
FRANGTON CHIYEMURA: Yeah, thanks. Thanks, Muyi, for that very interesting question. It seems like we are blinding ourselves here away.
So we wrote a piece, I think, in 2023, looking at the institutional actors involved in Africa’s energy markets. And we looked at the Chinese as well as the Africans in this context. So what we found in that piece was an institutional vacuum on the Chinese side, particularly in developing policy frameworks or institutional designs for these energy or utility enterprises in Africa.
And what was leading to that was a kind of divide in terms of remits or focus areas among different Chinese institutions involved in Africa’s energy sector. So we had, for instance, in that piece, what we refer to as the guardian ministries, which are various Chinese ministries with a kind of regulatory power to approve projects in African countries. And then we also had the second layer, which was development financial institutions, which had the responsibility for approving financial risk management, et cetera.
And then in the third layer, we had the kind of your project implementers, which are mainly state-owned and private-owned enterprises, focusing specifically on the energy aspect. But there is a divide between these three layers of institutions because much of work on Chinese projects in Africa is actually undertaken by these state-owned or privately-owned enterprises. And there is so much disconnect between what they are doing on the ground and the policy or institutional direction from the other institutional actors involved.
So that’s what I wanted to say, which is quite different than when we compare with Western development partners. And we kind of make use of South Africa as an example, where during the development of the Renewable Energy Procurement Program back around 2008, 2009, we saw several Western development partners actually being involved in the design of that renewable energy procurement program before even projects were commissioned at that time or before the bidding windows were commissioned at that time. So clearly there is a vacuum from the Chinese players around that because much of the work really is done by the project implementers.
And rarely do you see a Chinese minister of finance, or the Chinese Export-Import Bank, involved in influencing the policy direction of an African energy utility company or institution.
COBUS VAN STADEN: Thank you. And, you know, Frangton, I know you have to jump out now to make a different, you know, different appointment. So we want to thank you for joining us today and for all of your amazing work on that report.
So we will we will circulate that. We’re going to stay with Wei and Adjekai slightly longer. But yeah, thank you so much, Frangton.
So moving on, Wei, there’s a fascinating question that came in from Ebipere Clark, who’s a visiting fellow at the Africa Policy Research Institute in Berlin, focusing on this kind of like larger, the tension between grid expansion and consumer needs that Ajikai was also was also kind of referring to earlier and how both of those fit into the Belt and Road initiative. So I’d love to get your response to that. And then, Ajikai, feel free to jump in as well.
EBIPERE CLAR SOUNDBITE: China’s engagement in Africa is evolving from BRI1’s big infrastructure era to BRI2’s small-is-beautiful model, more commercial, more decentralized. However, this is happening in a post-COVID environment of tighter debt sustainability and questions about the bankability of local energy markets. If the real challenge is energy access, should African governments working with China begin to treat energy products for citizens like rooftop solar as a complementary path to large state-to-state energy projects, such as grid solar?
Under this dual mandate approach, what would it take to make this consumer led pathway financially and institutionally viable within the new BRI2 logic? Thank you.
WEI SHEN: Well, thank you, this is a very timely and important questions and people in China, many researchers in this field and even some policy think tanks are discussing this because we have notably surging exports of solar panels in the year, not just in Africa, I think in countries like Pakistan and Bangladesh as well. So it’s really kind of a revolutionizing people’s thinking about or imagining of energy pathways in the global South and particularly in Africa, because I think, again, the Chinese solar panels, the sales are really, really surging very fast. They’re really asking the questions, what are the role of decentralized system and centralized system in the future?
My impression is that if we look forward, if we really think about energy transition in a strategic way, we’ll probably need both, right? And because a rooftop system and this distributed system is very important for rural, particularly rural energy access, making previously impossible communities to be connected or to be lighted. But at the same time, if you think about many African governments’ aspiration of industrialization, increasing mineral processing, all these type of energy intensive activities, which probably still need some support of grid and stronger, better grid connected power supply.
So the question is that obviously we see the short term conflicts because the financing on both pathways are constrained. And also particularly the financing for the decentralized system is even more difficult in terms of considering private finance. And you need to have some blended finance mechanisms from the either from philanthropy or from development finance institutes rather than have complete commercially viable financial model for the massive amount of rural connection project, rural rooftop system projects.
And China played a limited role for developing those programs because, you know, Chinese capacities in developing this development aid, these type of programs are far lagged behind than their massive, than their capacities to develop massive infrastructure projects. And so that’s the areas that the Chinese actors, that’s what I’m advocating in China is these are the areas that China should look at, how to really pace up their development aid in these areas, because it’s not just about selling solar panels and dumping to the rural areas. You need to talk about the maintenance, afterward services, providing trainings and creating local entrepreneurship to make the system work in the long run, which is absent at the moment and which Chinese should learn from maybe other bilateral agencies or world banks and so on.
But that kind of learning pathways, we come back to the South-South collaboration, this type of question, that kind of mechanism is still lacking. So that come back to the question is like, what’s the role of the host government in Africa to asking for this, to really play a coordinating and facilitating role to navigating all the necessary resources that are needed to really make the rural transformation, rural electricity transformation happening. But at the same time, looking forward to, for example, if you still need to think about large processing for mineral sector, digital centers, and those activities still need grid power support.
And you need both. And how to coordinate these activities within very limited financial budget and financial sources is a really big challenge. And the smart government will win.
And I’m not sure all the governments are capable of doing this. But once the government find a way to lower down the transactional costs of this, for governments, are the countries that can really have both, rather than looking at centralized, decentralized, let’s say rivalry kind of sectors.
COBUS VAN STADEN: Adjekai, one of the issues that we’ve kind of circled around, but we haven’t really kind of dived into it specifically, is the issue of debt. Obviously, you know, at the moment, African, you know, a lot of a lot of African countries are facing very significant debt burdens. So I was wondering how this plays out in the electricity sector specifically and what you see, you know, kind of from this data, whether you see kind of pathways towards lessening the kind of sovereign debt burdens that development projects and climate projects are increasingly kind of adding to the African portfolio.
ADJEKAI ADJEI: As mentioned, from the electricity perspective, there’s essentially two levels of debt or two levels of debt that we can look at. So we can look at it at the utility level, and then we can look at it at the larger state level. So, as mentioned a bit earlier, at the utility level, most importantly, what happens is that a power project is built, and it’s usually sold by a state-owned utility to the public.
But a lot of the state-owned utilities are not financially viable and they’re actually running at a loss and so need quite a lot of government bailouts to continue functioning essentially. And then we look at it from a broader perspective, at a state level, where we see, again, a lot of African governments having competing requirements and just quite heavily indebted. And when we see Chinese investment coming in, it comes in usually at a state level, which is a bit different from, for example, private sector or Chinese states investment, which is a bit different from private sector investment, which we’ve seen kind of Western financiers go for a bit more, which then does not, how can I say, they both impact.
But, you know, the private sector investment essentially impacts on the utility level, whereas the Chinese investment impacts on the state level. And so I think it’s very important that there is the recognition that there is. A contribution of to Africa’s debt sustainability challenges by Chinese financing.
But there needs to be recognition of the importance of the infrastructure that’s coming out of that debt financing, and of the impact that infrastructure would have. And I think, you know, even with their approach to financing this infrastructure using debts, I think, I believe Wei Shen can correct me if I’m wrong, but it’s following a very similar developmental path that China had to say it focused on developing its infrastructure in order to catalyze its economy. So I think for me, it’s a personal view as much as there are debt sustainability challenges.
I think that, you know, a focus on infrastructure and getting Africa to where it needs to be from an infrastructure perspective, that that view needs to be weighed out and balanced against, I think, a very heavy focus on the debt aspects and less recognition of the impact that, you know, critical infrastructure has on economies and growth of economies, which is a stage that Africa is currently at.
COBUS VAN STADEN: So thank you so much. So this brings us to the end of our first China Africa Energy Forum. We’re very, very grateful to Adjekai, to Wei, to Frangton for joining us.
Thank you so much for all of your work. We’re delighted to be featuring it. And we would like to invite everyone to check out our China Africa Energy Tracker.
It’s very fun to play around with, like one really gets quite a deep and detailed kind of view of the complexity and the different levels of Chinese involvement in the African power sector. We will do more of these. We’re planning to roll out these conversations over a variety of topics over the next few months.
So please keep checking in on us for our podcast listeners. This will go out as a podcast as well. And it will remain up on YouTube to rewatch as well if you miss the live stream.
So thank you so much for joining us today. Thank you so much to Ajekai, to Wei, and to Frangton for joining us and to all of you for joining us. And we’ll see you again soon.
Bye bye.
