Slowing Down, Powering Up: 2017 Chinese Energy Development Finance

The 2017 update of the China’s Global Energy Finance (CGEF) Database shows China’s two global policy banks, the China Development Bank (CDB) and the Export-Import Bank of China (CHEXIM), are becoming the largest sources of energy finance for governments across the world. 

The interactive database, managed by the Boston University Global Development Policy Center, tracks Chinese overseas energy financing by CDB and CHEXIM to foreign governments. These institutions do not regularly and systematically publish this data. The latest update includes an interactive filter for the Belt and Road Initiative (BRI), allowing users to search by BRI countries. 

In a new policy brief, Junda Jin and Kevin P. Gallagher analyze the main trends and discuss changes in China’s development finance in the energy sector in 2017. The authors’ analysis is based on the amount of energy capacity for 87 percent of the 144 power plants in the CGEF Database—totaling roughly 76,000 MW for all Chinese overseas power plants. 

Main findings:

• In 2017, CDB and CHEXIM provided $25.6 billion in energy financing, increasing the total amount of energy finance by China’s policy banks to roughly $225.8 billion since 2000.  
• While 2017 lending represents a nearly 45 percent decrease from 2016 levels at $47.3 billion, the total number of loans and countries increased from the year before. 
• The majority of 2017 financing was in power generation, with significant increases in hydroelectric power plants. 
• Africa received the largest amount of energy finance at 26.7 percent of the total and BRI countries received 55.9 percent of total energy finance from CBD and CHEXIM.
• Declines in Chinese development finance are concentrated in significant reductions in extractive activities, energy transmission and distribution systems. 
• What is somewhat masked in the 2017 data is that there has been an increase in the dollar amount of loans in the power sector, which almost tripled relative to 2016 and exceeded the 2013-2016 average.

For the authors, the latest update shows China’s overseas energy finance continues to be a global phenomenon. Beyond Africa, the South Asia and Latin America regions remain large recipients of Chinese energy financing.