It is a familiar adage: China is known for its insatiable hunger for fossil fuels, so governments in the Middle East and Africa, awash with oil and gas, keep China fuelled, in return, China provides cheap financing for infrastructure development.
But recently, there has been a shift. China is increasingly setting its sights on renewable energy, marked in part by the country’s dedication to adhering by the Paris Climate Agreement. China has become a leader of the green bond revolution, following ICBC’s second green bond listing on the London Stock Exchange in June. In the first quarter of this year, China installed around 10 gigawatts of solar photovoltaic capacity and the government is looking into the viability of electric buses to reduce carbon emissions.
China’s focus on renewable energy at home is spreading offshore. ICBC’s involvement in marks it as this year’s best bank for infrastructure and project finance in the region.
In April, ICBC was mandated as the lead arranger for a $1.5 billion loan to fund the development of a 700 megawatt solar power project in Dubai. Acwa Power, a developer based in Saudi Arabia, and Shanghai Electric have been contracted to build the plant. Once completed, the plant will be the largest thermo-solar power plant in the world.
In Egypt, ICBC also provided financing for three solar power stations in Benban Solar Park, in the southern province of Aswan. Once completed, the park, which takes up an area of 37 square km, will improve the share of renewable energy in Egypt to 22% of all domestic energy use by 2020. ICBC’s funding will support the development of 165.5 megawatts of capacity out of a total 1.8 gigawatts.