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New Chinese coal policy scuttles Zim’s energy plans

IF there is a country likely to be hurt the most by Chinese President Xi Jinping’s decision for Beijing to stop building new power plants overseas, it is Zimbabwe.

Among several African countries with large deposits of coal, it is heavily dependent on China after it had sanctions imposed on it by the United States and some European countries because of former President Robert Mugabe’s human rights abuses and a policy of seizing land from white farmers.

Zimbabwe was planning to build several coal-fired power plants costing a total of US$15 billion, with Chinese lenders initially committing to fund them.

Private funding was not forthcoming, partly because of growing opposition from environmental campaigners.

But on Tuesday, in a pre-recorded speech to the United Nations General Assembly, Xi sounded a death knell for several coal projects, including in Zimbabwe, for which Chinese lenders were expected to provide financing.

Chinese cash funds African coal plants despite environmental concerns. The southern African nation’s demand for power exceeds its supply, causing it to seek to build more plants.

Its electricity shortage means it cannot attract power-intensive manufacturing companies.

Xi’s pledge could halt dozens of coal power projects in Africa, although there had already been a notable slowdown in new financing since Xi last year announced a target for net-zero emissions by 2060.

China is the single largest financier of coal-powered plants overseas as well as the largest producer and consumer of coal.

But Beijing has not funded any coal projects abroad in the first half of this year and the country’s largest financier of such projects, Industrial and Commercial Bank of China, said it would start phasing out coal from its portfolio.

The bank in July declined to fund the US$3 billion Sengwa coal project, in Zimbabwe’s north, as pressure grew from activists and communities.

Independent climate change think-tank E3G says Zimbabwe is among the laggards — also including Botswana and Mozambique — who continue to pursue coal-fired plants, bucking the global trend of retiring or not funding the environmentally destructive energy source.

The Zimbabwean government has been vocal in its continued pursuit of new coal, even as Chinese financiers pull out, E3G said in its latest report about the collapse of the global coal pipeline.

The country has 990 megawatts of coal power plants under construction and 4,5GW in the pipeline, but the Chinese government’s freeze on funding them is likely to force it to seek alternative sources of financing or shift to solar and hydro power.