China’s overseas energy financing last year dropped to the lowest level since 2008 after the pandemic hampered deal-making in developing nations, reported Bloomberg.
Financing for foreign energy projects, including power plants and mines, fell by 43% to $4.6 billion, according to Boston University’s Global Energy Finance Database, which tracks data from two state-owned development banks. More than half of lending was for a natural gas pipeline project in Nigeria, the study showed.
The impact of coronavirus added to a trend of dwindling project financing for the energy sector from President Xi Jinping’s Belt and Road Initiative. Infrastructure projects funded by China’s program in developing nations, such as Pakistan and Sri Lanka, have suffered issues including heavy debt loads, said Bloomberg.
“Power plant deals are not something you can do on your iPhone,” said Kevin Gallagher, a global studies professor at Boston University. “It takes a lot of negotiation in structuring the finance and engineering specs.”