China funds Africa’s green energy but raises debt concerns ^{CEFR B2}

China has become a major financier of power projects across Africa, funding hydropower, transmission lines and solar schemes that expanded electricity access. A Boston University working paper that used data for 2012–2020 in more than 850 subnational regions concluded that China-financed generation capacity helped reduce energy poverty at the subnational level.

Chinese lenders represented roughly 12 percent of Africa’s external debt by 2020. In 2024 President Xi Jinping promised larger investment and Beijing set up a Special Fund for the China–Africa Green Industrial Chain worth RMB 5 billion (about USD 700 million). The fund aims to support cooperation across the green industrial chain, including clean energy, green transport, critical minerals and the green upgrading of traditional industries. The China–Africa Development Fund has also signed memoranda with firms such as CNBM, Guangxi Liugong Machinery, JD Technology, Ganfeng Lithium and Beijing Wenhua Online. Chinese officials note that China has been Africa’s largest trading partner for 16 consecutive years and that exports of new energy vehicles, lithium batteries and photovoltaic products to Africa have grown rapidly.

Despite these advances, economists and international organisations warn about the risks of resource-backed and opaque loans. African Development Bank President Akinwumi Adesina urged debt transparency and an end to opaque natural resource-backed loans, arguing such deals complicate debt resolution and raise risk when negotiation and debt-management capacity are weak. The World Bank and the International Energy Agency point to public funding constraints, including high debt servicing costs, that make clean-energy finance harder. Media investigations show mixed country outcomes — for example cobalt-for-infrastructure links in the Democratic Republic of Congo, oil-backed loans tied to power projects in Nigeria, and Chinese-built transmission lines in Kenya — while local accounts report costly bills, disconnections and, near the Sicomines project, evictions, pollution and poor compensation. Overall, Chinese finance has reduced energy poverty in many areas but can increase dependency, governance challenges and exposure if commodity prices fall or debt becomes hard to manage.