Chinese firms to build more coal power plants in Asia despite Beijing’s pledge for greener Belt and Road Initiative projects
President Xi Jinping told the second Belt and Road Forum in Beijing in April this year that infrastructure projects built under the BRI must be green and sustainable.
China, which has pledged that projects built under its Belt and Road Initiative will be green and sustainable, will fund more fossil fuel power projects in Southeast Asia even as western, Japanese and South Korean financiers increasingly walk away from them over sustainability concerns.
This will be the case until the host nations – such as Indonesia – have come up with good enough financial incentives and expanded power transmission and distribution infrastructure to make mass renewable energy projects viable, according to Martin David, Asia-Pacific head of projects practice group at international law firm Baker McKenzie.
“While Chinese officials have signaled a move towards more sustainable projects in BRI nations, I don’t see this materially changing Beijing’s [actual] funding of infrastructure projects [there],” he said in an interview. “It will take some time for this to manifest into an obvious change.”
Chinese developers – mostly state-backed construction firms – still prefer to build large fossil fuel projects, on effort and return considerations, he added.
This is because bidding and contract preparation work involved in developing a power project typical requires similar effort, whether for a US$40 million renewable project or a US$1 billion thermal power project.
