In recent years, China has grown into a major provider of coal power finance in overseas markets, replacing financing by major development institutions while providing potentially less stringent environmental guidelines.
In September 2015, China made a surprise announcement that it would commit to “controlling public investment flowing” into high carbon overseas projects.
This was followed by an announcement in November 2015 that OECD countries are committing to common standards for coal subsidies, also potentially significantly restricting international finance for coal power.
Analysts in this report estimate that in absolute terms, USD 21-38 billion worth of Chinese finance went to overseas coal power
projects over the last ten years and, prior to the commitment, USD 35-72 billion worth was planned to finance new overseas projects.
Here they examine China’s role in financing coal power generation, how China’s export support and absolute domestic cost advantage creates concerns regarding overseas coal power development and seek to interpret China’s commitment to control investment flowing to overseas projects.