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Paw Tracker newsletter (Week of Feb 21)

Last week we highlighted the 4x380MW “power island” project on Obi Island, Indonesia (which looks very much like a coal-fired power plant), for which Energy China and Tianjin Electric Power Construction Company recently won a tender. Since then, conversations in China’s overseas energy watching space have revealed some potential detail on the definition of “new” in Xi’s September 2021 pledge to not build any new coal-fired power plants overseas. Such details, though not officially confirmed, may provide partial explanations to a few recent project developments across the Belt and Road.

The Paw Tracker newsletter, developed by Panda Paw Dragon Claw, provides up-to-date and granular project-level information on the Belt and Road Initiative. Drawing from Chinese sources of information that are often disjointed and difficult to access, the newsletter also aims to become a convening space for watchers of the BRI to share and cross-check information about projects and their impacts on the ground. 

Talk of the Town

A since deleted article on the WeChat public account, Overseas Power, published on Tues 22 Feb posted a list of 13 critical questions the signing of a new coal power project EPC in Indonesia raises. The author wrote, “ever since China’s announcement in September last year that it will not build any new coal power projects overseas, a number of details have remained unclear.” They then posed questions including: Does the pledge include “captive” and “complementary” (“配套”) coal power plants in industrial zones? If a Power Purchase Agreement (PPA) for an unbuilt plant has already been signed, does the project count as new? If an EPC for an unbuilt plant has been signed, does the project count as new? If financing for an unbuilt plant has already been secured, does it count as new? If a host country is supplying the finance, can a Chinese company construct the plant? Can Chinese companies proceed with projects that already received the relevant approval from relevant Chinese authorities prior to 21 Sept 2021? Can Chinese companies supply equipment to a coal power project otherwise financed and built by other entities? Can Chinese companies with shares in host country power companies invest, construct or provide equipment for new coal power projects?

The article triggered quite some debate among overseas energy sector analysts. One comment underneath the question list provided some potential insight into what Chinese authorities understand as a “new” overseas coal power project. The commentator suggested the existence of an internal cut off date of 1 August 2021. According to this information, any overseas coal power projects that have secured one of the following conditions before that date, is allowed to go ahead: 1) The project is already finished; 2) The project has already begun construction; 3) Financing agreement for the project has already been signed; 4) Insurance agreement for the project has already been signed; 5) Project developers have already signed binding contracts with the host country government, such as investment contracts, purchasing agreements, etc.; 6) The project has already received approval from relevant domestic bodies, such as the Ministry of Commerce and NDRC.

The information has not been confirmed, but underscores the need for transparency and clarity on President Xi’s globally welcomed announcement. 

Recent developments in Pakistan further highlight the importance of getting this clarity . According to Pakistani media, during his state visit to Beijing on 6 Feb, Prime Minister Imran Khan managed to receive assurances from the Chinese side that finance for the 300MW Gwadar coal power plant project is forthcoming. This comes after project developers China Communications Construction Group failed to meet two earlier deadlines for financial close, June 2019 and June 2021, after being unable to secure Sinosure insurance for the project. In short, the project has been on the books since as early as 2015, when it was listed as an “early harvest” project in the first phase of CPEC, but never received insurance, reached financial close, nor began construction. Khan’s state visit to China earlier this month has apparently ensured that all of those are now forthcoming. 

These promises sit in stark contrast to the Uglwejk III project in Bosnia Herzegovina, whose project developers, Sunningwell International, last month stated that since China’s September pledge, Chinese finance for the project is no longer forthcoming. The different fates of the projects suggest the nuanced (or inconsistent) implementation of China’s no-new-coal pledge that the outside world still doesn’t fully understand.

This week's highlight project

Kenya: First passenger train run by local crew begins operation on Nairobi-Malaba railway

On Feb 23, a passenger train set off from the Nairobi station for Malaba in western Kenya. The train was running on a 487km extension of the Mombasa-Nairobi Standard Gauge Railway built by the China Road & Bridge Corporation (CRBC), which started taking passengers in 2019. What’s  special about this particular train was that it was serviced independently by a crew of 7 Kenyans, a milestone of agreed technology transfer to Kenya for the railway, according to CRBC.

Why it gets our attention: Handing over the operation and maintenance of the Mombasa-Nairobi railway back to the Kenyans has been a key focus of negotiation between China and Kenya since the beginning of the railway’s operation. The conversation about the employment of Kenyans and key positions being occupied by Chinese workers has at times been highly politically charged. Last year, Kenya Railways Corporation (KRC), the owner of the railway, announced that it would assume all operations and maintenance in May 2022, five years earlier than an originally planned full takeover in 2027.

Other project & corporate updates

Argentina: PowerChina inks deal to build Arauco solar power project

On 24 Feb, Power Construction Corporation of China, also known as PowerChina, signed an EPC contract to construct phase I and II of the 199 MW Arauco solar power plant in western Argentina. It is the company’s ninth such project in Argentina to date and comes in the wake of the signing of an EPC contract for the 400 MW Arauco wind power project, billed together as “One Wind and One Light.” The article on BRProject claims that Power China’s renewable energy projects in Argentina to date have a total generating capacity of 1GW.

A bit more context: China is a major investor in Argentina’s renewable energy sector. After the country launched a program in 2016 to raise funding for renewable energy projects, China was awarded 29% of the available energy projects. Argentina has only expanded its renewables push since, setting its sights on producing 20 percent of the country’s electricity from renewable sources by 2025. China is set to continue playing an important role in achieving that goal. China National Nuclear Corporation signed a deal to construct the Atucha III nuclear power plant early last month, only a week before Argentina announced that it would sign on to the Belt and Road – and receive $20 billion in infrastructure investments from China.

If you have further details of any of the above mentioned projects that you would like to share with the community, please reach out to us through

Worth your time

China’s Belt and Road was an obvious subtext to the European Union-African Union Summit and Ursula von der Leyen’s visit to Senegal in the week starting Feb 14, where Africa-focused details of the EU’s ambitious Global Gateway infrastructure project were announced. But what is Global Gateway? How does it plan to raise its promised EUR 300 billion? And what strengths and weaknesses does the initiative possess vis-a-vis Belt and Road. Schwarzmann Scholar, Harry Seavy, contributed an interesting article to Panda Paw Dragon Claw arguing that, among other things, the EU must make sure to tell a strong narrative of the Global Gateway’s vision in order to compete with the influence of the Belt and Road.

We will continue to follow the rise of competing infrastructure initiatives.

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