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China-Africa cooperation in renewable energy can accelerate Africa's green industrialization
By Liu Jian | VOL. 8 December 2016
Shi Dinghuan makes a speech at the World Green Design Forum Milan Summit on Oct. 31, 2015 (XIN HUA)

Once the sun sets over Sub-Saharan Africa, switching on the lights is easier said than done. Much of the region remains cloaked in darkness until daybreak. In 2015, Sub-Saharan Africa had more than 635 million people living without access to electricity, mostly in rural areas, according to the International Energy Agency (IEA).

These illuminating statistics and the need to utilize the continent's vast natural resources more effectively have not gone unnoticed in China. To assist in addressing this, Shi Dinghuan, Chairman of China Renewable Energy Society and former counselor to China's State Council, recently proposed to establish the China-Africa Alliance of Renewable Energy Industries (CAAREI) to gather and integrate China's technologies, products, funds and solutions in the renewable energy sector, so as to speed up China-Africa industrial capacity cooperation in this area.

As Shi said back in 2011 at the 17th Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change held in Durban, South Africa, African countries hope to learn from China's experience in developing renewable energy sources, and there is huge potential for China and Africa to collaborate in the clean energy sector.

Five years later, Shi embarked on the African soil again to attend the two-week Marrakech Climate Change Conference (COP22) in Morocco in November. Shi believes the meeting marks a new start for the global community to turn the Paris Agreement on climate change into action.

Nations that ratified the Paris Agreement reaffirmed their commitments to achieve goals submitted to the United Nations. "These have injected confidence at a time when we are moving forward and help accelerate actions across a broad range of issues to tackle climate change challenges," echoed Xie Zhenhua, Chinese climate special envoy.

Shi believes the CAAREI will help achieve the goals and address the challenges. "China can share the knowledge and technologies with other developing countries to become more climate-resilient, get on a greener and more sustainable path of growth, as well as help them better implement the Paris Agreement," he said.

Energy as priority

Referred to as the "sun continent," Africa receives many more hours of bright sunshine during the course of the year than any other continent, according to the World Sunshine Map. This source of solar energy, as well as other renewable energy sources such as wind, hydro power, geothermal and biomass energy all augur well for the future.

"Reliable power supply is vital for economic growth, in particular in Sub-Saharan Africa where power shortage results in slow growth and inefficiency," said Shi. "Besides, increased generation capacity can act as an enabler for industrialization and the services sector, in addition to increasing standards of living for its people," he added.

However, he pointed out that confronted with huge energy requirements to power its development, Africa continues to lag behind in the exploitation of renewable energy mainly due to lack of technology, funding and skills to develop clean energy projects.

The renewable solution

Over the decade from 2010-20, China will contribute 30 percent of the new production capacity additions in Sub-Saharan Africa, while greenfield power projects contracted to Chinese companies have become widespread in the region. More than half of these projects are based on renewable energy, mainly hydropower, according to a report released by IEA in July 2016.

The report, titled Boosting the Power Sector in Sub-Saharan Africa: China's Involvement, stated that Chinese-built greenfield projects increase the diversity of the Sub-Saharan Africa power capacity mix and accelerate the development of renewables (wind, solar, biomass and hydropower) in the region.

Currently, African countries, with limited funding and skilled personnel, cannot conduct research and development of renewable energy in large scale like China, so the shortcut for Africa is to cooperate with countries with mature technology, according to Shi.

To address those challenges facing Africa, the Chinese Government has listed the green development plan as one of the 10 major China-Africa cooperation plans for 2016-18. The two sides will deepen cooperation in tackling climate change, strengthening resilience, promoting adaptation, supporting capacity building, technology transfer as well as financing for monitoring and implementation, according to the Forum on China-Africa Cooperation Johannesburg Action Plan announced last December.

In line with this, Shi said more than 40 Chinese companies and organizations plan to participate in the CAAREI, including state-owned companies such as the State Grid Corp. of China.

"Currently, we are working on the systematic planning and layout of power plants and power grid networks construction in Africa, to better meet the local needs in major cities, villages and industrial bases," he said.

Shi also emphasized the importance of developing distributed solar systems, solar home systems and micro-grid power systems in Africa, because those systems are more applicable in rural and remote areas, where electricity is most needed.

Green technology transfer

Supported by the United Nations Development Program, China has been working with African countries such as Ghana and Zambia on the China-Africa South-South Cooperation on Renewable Energy Technology Transfer project, with the aim of transferring renewable energy technology to African countries and enhancing off-grid, community-based electrification.

"Numerous Chinese technologies can improve electricity access in rural areas, if transferred and deployed appropriately," said Shi.

To facilitate the process of technology transfer, a Technology Transfer Center for Renewable Energy was set up in early 2015 in Beijing to provide African countries with information about global renewable energy industry, technology and future prospect. It will also assist African countries to gradually master the technology to be self-sufficient, and promote the development of renewable energy industry and technology in Africa, instead of relying on imports.

In October, Zambian and Ghanaian energy experts were invited to China to observe and learn from Chinese experiences, while Chinese experts aim to find more effective ways to transfer their knowledge.

Raising funds

According to IEA's report, close to 80 percent of Chinese-built power projects (generation, transmission and distribution) in Sub-Saharan African countries have been financed by Chinese banks or institutions, and the power project investments were estimated at about $13 billion from China between 2010 and 2015.

The main financier is the Export-Import Bank of China, which is a policy bank fully owned by the Chinese Government, providing finance to more than 60 percent of overseas projects. Chinese commercial banks are also increasingly looking at supporting power projects in Africa, with the Industrial and Commercial Bank of China (ICBC) being among the most active.

ICBC and Standard Bank Group Ltd., Africa's largest lender, agreed to lend as much as 20 billion rand ($2.2 billion) for renewable energy projects in South Africa in April 2013. The objective of this partnership is to facilitate the entry of investors into South Africa, said then ICBC Chairman Jiang Jianqing in a statement on Standard Bank's website.

Shi also hopes that the CAAREI can help build a financial platform through which some of the Chinese investment projects on renewable energy in Africa can get funding from either Chinese banks, private businesses or international organizations.

Building capacity

Apart from technology transfer and raising funds, training Africans technology know-how is also important, which will make the renewable energy development in Africa more sustainable, said Shi.

In 2015, Chinese and Kenyan investors launched a technology transfer and training center in an industrial park of Nairobi. Beyond the training of local technicians, the center aims to establish an assembly plant for solar lighting systems. Short-term training is also held in China for African government officials and technicians. For instance, the North China Electric Power University hosted one-month training for officials from eight French-speaking African countries in June 2015, sponsored by the Ministry of Commerce.

An important part of the CAAREI's work is to promote capacity building, said Shi, adding that some Chinese universities and research institutions plan to join the alliance.

"They can provide training and education opportunities for African technicians to learn the new energy technology, as well as train more local management talents to build and develop their own new energy industry," said Shi.

Capacity building is also an opportunity for the Chinese side. Shi suggested Chinese companies investing in Africa should learn more about the government policies, development plans and industries in Africa, so that they can better cooperate with their African counterparts.

Comments to liujian@chinafrica.cn


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