LONDON – A Zimbabwean company that had been banking on Chinese financing to build a major coal-fired power plant says it is now looking for alternative backers as China pulls back on funding such projects overseas.
The effort by RioZim Ltd (RTNR.ZI), one of Zimbabwe’s biggest mining and energy companies, reflects how China’s recent U-turn on foreign coal financing is forcing developing nations across Africa and Asia to rethink their energy plans. China, which had been a top funder of coal power projects around the globe, announced in September it would not build new coal projects abroad as part of efforts to curb future carbon emissions.
Energy and climate specialists are watching to see the impact, including whether it will force a speedier shift to cleaner energy, result in other funders stepping in or lead to power shortages. Zimbabwe, which already suffers from a lack of electricity, has among the biggest coal reserves in Africa.
“The energy policy juncture Zimbabwe now finds itself at is emblematic of what many developing countries around the world are facing,” said Leo Roberts, UK-based research manager who focuses on coal transition at climate think tank E3G.
Plans for the multi-billion dollar Sengwa power plant in northwest Zimbabwe involve more than doubling the country’s current electricity capacity.