HomeRegional NewsCentral AfricaChina finances US$9.3 billion for African hydropower dams

China finances US$9.3 billion for African hydropower dams

Artist’s impression
of the US$2.2 billion
Gibe III hydropower
project under construction
on Ethiopia’s Omo River
New York, United States — ESI-AFRICA.COM — 13 September 2011 – The Chinese “’ through their engineering and manufacturing giants “’recently completed or are in the process of participating in hydropower projects worth US$9.3 billion in various countries across the African continent.

According to data compiled by Bloomberg and International Rivers “’ a Berkeley, California-based environmental group “’ the hydropower projects concerned are in Zambia, Gabon, the Democratic Republic of Congo (DRC), and elsewhere on the continent,

When completed in 2013, Gibe III on Ethiopia’s Omo River will be Africa’s tallest dam “’ a US$2.2 billion project. Some 965km to the north, Sudan is preparing to build the US$705 million Kajbar dam on the Nile River. The US$729 million Bui project on the Black Volta River, to be finished in 2013, will boost Ghana’s hydropower capacity by a third.

What these megaprojects have in common is Chinese money and know-how. Companies such as Sinohydro Corporation and Dongfang Electric Corporation are key players in their construction, and they are financed by Chinese banks with support from the government in Beijing, reports Bloomberg Businessweek in its latest issue.

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 US$100 million for solar projects in 40 African countries. 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, Frontier Advisory CEO, 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 US$127 billion in 2010, up from US$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% of the continent’s total trade, according to the African Development Bank.
The state- owned China Development Bank Corporation established a US$1 billion fund to finance Chinese enterprises in Africa in 2007, and now plans to increase that to US$5 billion.

China’s initiative in renewable energy 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 and Export of Machinery and Electronic Products. “China needs new emerging markets to consume solar products,” Sun says.

Sub-Saharan Africa, with some 800 million residents, generates about the same amount of power as Spain, with a population 46 million, according to the World Bank. The bank says that since 1995, Africa’s power sector has grown an average of 1% annually, or less than 1,000MW a year, even though capacity needs to expand by more than 10% a year to meet demand.