A dynamic institutional analysis of China’s engagement with Africa’s renewable energy market

ABSTRACT

Renewable energy activities have increasingly become the central component of China’s proposed green Belt and Road Initiative. Yet, scaling up these activities requires significant institutional changes of the current Chinese state and financial-industrial complex. Informed by a conceptual framework that builds on multi-level institutional analysis, we assess the institutional challenges constraining the scalability of Chinese renewable energy projects in South Africa and Ethiopia. Our study reveals that the institutional fragmentation and vacuum in China have led to the lack of a clear engagement strategy with African markets. In addition, the development of wind and solar energy projects in Africa is often taking place amid the ongoing and fast-changing energy sector governance, which is not yet appreciated by the key Chinese actors. We argue that promoting Chinese-backed renewable energy projects in Africa requires new institutional arrangements that can adapt to competitive and divergent local market conditions and regulatory changes.

KEYWORDS:

• China
• Ethiopia
• South Africa
• wind and solar energy
• institutions
• Green BRI

Acknowledgement

The authors would like to express our gratitude for your invaluable feedback and support on our paper presented at the workshop organized by Johannes Urpelainen, Joanna Lewis, and Yixian Sun in 2021. We would also like to acknowledge the Natural Resources Defense Council and the Africa Climate Foundation for their support in the original field investigations that served as the basis for this manuscript. Any errors that remain are our sole responsibility.

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1. South Africa’s Department of Mineral Resources and Energy has now resumed Bid Window 5 and 102 bids were submitted and around 25 bids were chosen, see https://www.ipp-projects.co.za/ProjectDatabase. Bid window 6 was also announced and submission of bids closed on 11 August 2022.

Additional information

Funding

The work was supported by the Natural Resources Defense Council.