A recent study from Boston University highlights China’s unique opportunity to spearhead an energy revolution in Africa but underscores the need to reverse nearly two decades of neglect in green power investments on the continent.
Despite emerging as Africa’s largest bilateral trading partner and financing numerous infrastructure projects, China’s focus on fossil fuels has hindered Africa’s energy transition.
Three years ago, Chinese President Xi Jinping pledged to address climate change by supporting green and low-carbon energy initiatives, vowing not to build new coal-fired power projects abroad.
However, according to Reuters, Chinese lending and investment in Africa have allocated a mere 2% to renewables like solar and wind, compared to over 50% directed towards fossil fuels.
“Given current economic challenges and future energy opportunities, China can play a role in contributing to Africa’s energy access and transition through trade, finance and FDI (foreign direct investment),” the report said.
The report from Boston University’s Global Development Policy Center and the African Economic Research Consortium emphasizes Africa’s immense green energy potential, which remains largely untapped due to the lack of substantial support. Instead, Chinese investments have primarily targeted sectors related to commodity extraction and electrification projects.
While Chinese funding has contributed to export revenues for African economies, it has not translated into significant advancements in renewable energy technologies.
For instance, a considerable portion of hydropower projects financed by China’s Export-Import Bank is intended to support metal extraction rather than fostering sustainable energy solutions.
Currently, fossil fuels dominate Africa’s energy landscape, accounting for approximately 75% of total electricity generation and 90% of energy consumption in 2022.
To catalyze Africa’s energy transition and enhance energy access, the report advocates for increased Chinese investment in renewables and a shift away from fossil fuel-centric financing strategies.
By leveraging trade, finance, and foreign direct investment, China can play a pivotal role in facilitating Africa’s transition to a greener and more sustainable energy future.
