Africa’s Friend China Finances $9.3 Billion of Hydropower
When completed in 2013, Gibe III on Ethiopia’s Omo River will be Africa’s tallest dam, a $2.2 billion project that conservationists say will deprive birds and hippos of vital habitat.
Some 600 miles (965 kilometers) to the north, Sudan is preparing to build the $705 million Kajbar dam on the Nile, which would inundate historic towns and tombs of the Nubian people, descendants of the pharaohs of ancient Egypt. The $729 million Bui project on the Black Volta River, to be finished in 2013, will boost Ghana’s hydropower capacity by a third -- and flood a quarter of Bui National Park while displacing 2,600 people.
What these megaprojects have in common is Chinese money and know-how. Companies such as Sinohydro Corp. and Dongfang Electric Corp. are key players in their construction, and they’re financed by Chinese banks with support from the government in Beijing, Bloomberg Businessweek reports in its Sept. 12 issue.
The country’s engineering and manufacturing giants have recently completed or are participating in at least $9.3 billion of hydropower projects in Zambia, Gabon, the Democratic Republic of Congo, and elsewhere on the continent, according to data compiled by Bloomberg and International Rivers, a Berkeley, California-based environmental group.
A similar, if smaller, push is happening in newer renewable technologies. Chinese enterprises are now the top investors in African solar power,and China’s government in June earmarked $100 million for solar projects in 40 African nations.
Street Lights, Refugee Camps
Chinese photovoltaic panels already power street lights in Sudan, sit atop schools and hospitals elsewhere and can be found in United Nations-supported refugee camps in the Sahara.
“Renewable energy is merely the latest” facet of China’s move into Africa, says Martyn Davies, chief executive officer of Frontier Advisory, a consultant in Johannesburg working with Chinese companies on the continent. “The traditional actors -- the Germans, the French, the Spanish -- won’t be able to compete on price.”
Overall Sino-African trade reached $127 billion in 2010, up from $10 billion in 2000, Beijing’s commerce ministry reports. In 2009, China unseated the U.S. as Africa’s biggest trading partner, accounting for 14 percent of the continent’s total trade, according to the African Development Bank. The state- owned China Development Bank Corp. in 2007 established a $1 billion fund to finance Chinese enterprises in Africa and now plans to increase that to $5 billion.
Opens New Markets
China’s initiative in renewables will open up new markets for its growing green energy sector. Only Chinese panels will be used in solar projects the country backs, says Sun Guangbin, secretary-general of the China Chamber of Commerce for Import & Export of Machinery and Electronic Products.
“China needs new emerging markets to consume solar products,” Sun says.
China’s Suntech Power Holdings Co. is supplying panels for a 50-megawatt solar plant at Droogfontein, South Africa. China Longyuan Power Group last year said it would open wind farms in South Africa, and Hua Lien International Holding has established ethanol joint ventures in Benin, Sierra Leone, and Mozambique.
Sub-Saharan Africa, with some 800 million residents, generates about the same amount of power as Spain, population 46 million, according to the World Bank. The bank says that since 1995, Africa’s power sector has grown an average of 1 percent annually, or less than 1,000 megawatts a year, even though capacity needs to expand more than 10 percent a year to meet demand.
Few Strings Attached?
One attraction for African governments is that Chinese investment comes with few strings attached, researchers and conservationists say. China doesn’t tie its aid to human-rights progress, environmental issues, or democratic governance, as the U.S. and Europe do.
“Many African countries find that very acceptable,” says John Mitchell, an associate fellow at Chatham House, a foreign affairs research group in London.
Due to human-rights concerns, Sudan had trouble raising money for its $1.8 billion Merowe Dam until Chinese banks came up with funding, International Rivers says. The project was finished two years ago.
Chinese investment is helping Africa reach levels of dam- building not seen in years, bringing back memories of hydropower campaigns that conservationists deem a disaster.
“The social, environmental, and economic track record of large dam projects in Africa is very sobering,” says International Rivers Policy Director Peter Bosshard. While Chinese companies have improved their environmental record in the past few years, “there also continue to be big gaps,” Bosshard says.
Advocates say hydropower can help make up Africa’s chronic power deficit. Gibe III, for instance, will double Ethiopia’s power generation capacity. That, says Prime Minister Meles Zenawi, will be instrumental in fighting poverty in a country nicknamed “Africa’s water tower” for the rivers coursing out of its highlands.
Dams can help Ethiopia electrify remote villages, increase irrigation and earn money from electricity exports, Meles said at an Addis Ababa news conference in March.
“Hydropower,” he said, “will have to be at the center of Africa’s energy future.”
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