China policy banks slashed overseas energy finance to zero in 2021: Research

Chinese President Xi Jinping pledged to end his country's support for new overseas coal power plants. PHOTO: REUTERS

SHANGHAI (REUTERS) - China's two main trade policy banks made no new overseas energy finance commitments this year, a first for this century and a sign that Beijing's pledge to stop investing in foreign coal plants is already in effect, new research showed on Tuesday (March 15).

The shift was highlighted in a new study of China Development Bank and the Export-Import Bank of China project commitments last year by the Boston University Global Development Policy Centre.

Chinese President Xi Jinping pledged to end his country's support for new overseas coal power plants during a video address to the United Nations General Assembly last September.

"It is a dramatic drop, but ultimately not surprising, given the persisting impacts of the Covid-19 pandemic, narrowing borrowing capacities in developing countries and the global trend towards phasing out coal," said Dr Cecilia Han Springer, assistant director of the centre's Global China Initiative.

The two banks had issued a total of US$234.6 billion (S$320 billion) in loans to foreign governments and associated energy sector entities since the year 2000, including US$75.1 billion since 2016 alone, far exceeding total energy sector lending by the World Bank over the period.

They did not respond to faxed and e-mailed requests for comment.

Dr Han Springer said the figure could rebound after last year, and that there was a major opportunity to invest in global clean energy infrastructure.

President Xi's pledge meant that 99 per cent of global development financing was now committed to the transition to clean energy, Boston University said in a previous study.

However, it was unclear whether his vow would also lead to the cancellation of projects already in the pipeline.

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