Webinar Summary – Introducing the China Overseas Finance Inventory (COFI) Database

By Oyintarelado (Tarela) Moses

On March 1, 2022, the Boston University Global Development Policy (GDP) Center joined a webinar hosted by the Word Resources Institute (WRI) to launch the China Overseas Finance Inventory (COFI) Database.

WRI created the database in collaboration with the GDP Center, the China Africa Research Initiative at the Johns Hopkins University School of Advanced International Studies (SAIS-CARI) and the Inter-American Dialogue. The COFI Database covers information on China’s debt and equity investments in the power generation sector from 2000-2020 in 76 Belt and Road Initiative (BRI) countries. By drawing on nine database sources, the COFI Database provides an overview of 430 power plants, 220 equity transactions and 253 debt transactions. Tracking both equity and debt transactions contributes to understanding the full picture of financing mechanisms China provides overseas and aids with matching financial information with the technical characteristics of the financed assets.

The COFI Database addresses previous data gaps that existed on Chinese investments in the power generation sector. It provides data on both Chinese greenfield and mergers and acquisition equity investments for power plants around the world. This commercial data is joined with data from the GDP Center’s suite of databases on Chinese policy and commercial banks loan commitments. Specifically, the COFI Database draws from the China’s Global Energy Finance (CGEF) Database, the Chinese Overseas Development Finance (CODF) Database, the Chinese Loans to Africa (CLA) Database, the China-Latin America Finance (CLAF) Database and the China’s Global Power (CGP) Database.

Data from the GDP Center’s databases and other datasets was funneled into three variable types: technical characteristics of the power plants, equity investment information and debt investment information. Technical characteristics of each power plant include the commission year, installed capacity and primary fuel. Investment value information includes the year, amount and financiers for both equity and debt investment transactions. The COFI Database is available through an open data portal and the downloadable data file includes a calculation toolkit tab for analyzing raw data at the country, regional and sub-regional level.

While the COFI Database is comprehensive, there are some data limitations. Gaps do appear in the dataset due to the lack of publicly available information on certain variables. For example, there is incomplete evidence on equity investments in the database, as some investment amounts are missing for transactions retrieved from commercial databases.

Nonetheless, information in the dataset illustrates important results. Chinese policy banks, commercial banks and other investors provided $106.35 billion in debt investments for power generation to BRI countries from 2000 to 2020. Based on power plant capacity by primary fuel, Chinese debt investments largely supported coal power plants; however, the hydropower sector received the largest dollar amount of debt investment. Overall, Pakistan, Indonesia, Laos, Portugal and Vietnam received one-third of the number of the investments. In terms of the number of power plants supported in decreasing order, hydropower, coal, solar photovoltaics (PV), onshore wind and gas power plants received the most investment.

Moderated by Shuang Liu from WRI, the panel discussion included Cecilia Han Springer from the GDP Center, Deborah Bräutigam from SAIS-CARI and Margaret Myers from the Inter-American Dialogue. They shared their views on managing data on Chinese financial activity, the importance of such databases and their expectations regarding China’s policy decisions in the power generation sector.

Firstly, the panelists discussed the challenges associated with collecting data on Chinese development finance, commercial lending and equity investments. The panelists agreed that levels of transparency vary across regions and types of information. Tackling this challenge has led to creative methodologies grounded in triangulating sources to confirm the existence of projects. To find transactions, these institutions balance manual data collection and computing-power data collection while inviting skilled researchers with regional knowledge to interpret and confirm region-specific data points. Each institution revisits all transactions on an annual basis to verify the status of commitments by assessing if any are experiencing delays in financing or project implementation. Recognizing and addressing these challenges have helped institutions to provide credible data.

According to the panelists, the COFI Database and accompanying databases are not only valued because of their transparent information, but also because of the utility they provide for policy decisions and implementation. When datasets are released, researchers explain the data through policy briefs and bulletins, making it easy for policymakers to digest and use the data. The databases also enable the public to track and monitor progress toward Chinese government commitments. For example, researchers can use the COFI Database to track the implementation of Chinese leader Xi Jinping’s announcement that China will no longer build coal power plants overseas. Researchers could also use the data to analyze if China’s financing in Africa is shifting from debt loan commitments to more equity investments.

Commenting on emerging data trends and policy implementation, Springer noted that the scale of China’s overseas energy finance may or may not change, but the composition of the financing is expected to shift from support for fossil fuel projects to renewables due to increasing clean energy demand from host countries. In the power generation sector, the GDP Center will continue to follow how China codifies a green BRI and the role of China in facilitating a clean energy transition globally. The COFI Database will be an essential tool for analyzing these and other trends.

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