Energy Investment

Many countries of the Belt and Road Initiative are among the world’s major energy-producing and consuming countries. At the same time, they are mostly developing countries, with the requirement to continue expanding their energy markets. As many of China’s investment and financing projects along the Silk Road have climate effects, China plays a major role in supporting BRI countries in adjusting their energy structure and building climate-resilient infrastructure, reducing carbon emissions and being more adaptable to climate change.

At the 43rd summit of the Association of Southeast Asian Nations (ASEAN) in September 2023, "Accelerating just and inclusive energy transition" was a key action given by leaders in their statement. Chinese Premier Li Qiang made it clear at the 18th East Asia Summit in September that he wants to deepen cooperation with ASEAN countries: collaborating on energy, climate change and electric vehicles will realise shared growth.

Renewables now take a bigger share of China's energy-related overseas investment

Source:  Green Finance and Development Center, based on China's Ministry of Commerce data

Case:  Jatigede Project

Type: Energy (Dam)

Country: Indonesia

Total investment: USD 40.45 million

Project brief:

Jatigede Dam, contracted by China's Synohydro Corporation and officially began impounding its reservoir in August 2015, is the second largest dam in West Java of Indonesia. The reservoir's catchment area encompasses 1,460 sq km. The dam is 110 m high, and its crest elevation is 265 m. The minimum water level elevation is 230 m, and the normal reservoir elevation is 260 m. The dam will hold a reservoir with a 1.06 billion cum storage capacity. It has carryover storage.

The 110-megawatt (MW) Jatigede hydropower plant is expected to become operational in 2020 with an annual generating capacity of 450 million kWh. If we calculate the current electricity price of the surrounding area as IDR800 per kilowatt-hour, the annual economic income it generates for Indonesia will stand at IDR360 billion or about USD40.45 million.[1]

Jatigede Dam

Image: Jatigede Dam in Sumedang, West Java. [photo: Kompas/Lucky Pransiska]

[1] China International Electronic Commerce Center, Ministry of Commerce, http://www.mofcom.gov.cn/article/beltandroad/id/enindex.shtml


Case: Dawood Wind Power Station (Pakistan)

Type: Energy (Wind Power Station)

Country: Pakistan

Total investment: USD 115 million dollars

Project brief:

Power shortages have been a major constraint on the entire Pakistani economy. Besides, Pakistan's electricity structure is unsound, with about 60% of the country's electricity supply coming from oil and gas. At present, Pakistan's renewable energy (excluding hydropower) generation volume is small, accounting for only 0.4% of the country's total electricity generation[1].

Pakistan's Dawood wind power project is one of the first 14 priority energy projects under the “Belt and Road Initiative” of the China-Pakistan Economic Corridor (CPEC). HydroChina, a subsidiary of PowerChina, acquired 93.89% of the equity of Pakistan Dawood power company and set up a China-Pakistan joint venture, HydroChina Dawood Power (Private) Limited (HDPPL), registered in Karachi to develop the Dawood wind farm. Dawood has an installed capacity of 49.5 megawatts and a total investment of 115 million dollars. The project adopts the BOO (Build-Own-Operate) pattern and has signed a 20-year power purchase agreement with the Pakistan Power Grid Corporation.

The Dawood wind power project in Pakistan provided 200 new jobs for local residents during its construction. After completion, the project will generate 130 million kilowatt-hours of electricity annually, which can meet 100,000 Pakistani homes’ needs and ease the country’s electricity shortage. At the same time, compared with thermal power generation, the renewable electricity produced by wind power stations has no direct greenhouse gas emission, while promoting sustainable development.

Wind mills

Image: Dawood Wind Power Station [photo / Green Finance & Development Centre]

[1] Hong, R. (2020). The Pakistan Dawood Wind Power Project – A Climate Investment and Financing Project in the Belt and Road Initiative (BRI). Green Finance & Development Center.


Case: Indonesia and China Sign 2GW Renewable Energy Agreement

Type: Energy (Solar)

Country: Indonesia

Total investment:  N/A

Project brief:

Framework Agreement was signed between China’s Suntech (a world-renowned manufacturer of high-performance photovoltaic products) and Singapore-based Vena Energy in Jakarta to explore opportunities for exploring opportunities for the establishment of local production lines for components of solar photovoltaic panels and energy storage systems.

The project is seen as the most significant renewable energy initiative in Southeast Asia given its high production capacity of 2GW of solar power in addition to a battery energy storage system capable of storing more than 8 GWh of clean energy.

The Framework Agreement also comes within the “Long-Term Strategy for Low Carbon and Climate Resilience 2050” announced by Indonesian President Joko Widodo in 2021 along with expanding Indonesia’s renewable energy supply chain.

Image: Reuters