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Paw Tracker newsletter (Week of Feb 14)


As the crisis in Ukraine occupied headlines internationally, it caught the attention of Chinese society through an unusual social media confrontation, apparently demonstrating a keen interest from the many “parties involved” in shaping Chinese public opinion on the Ukraine crisis. Traditional media coverage, meanwhile, raised questions about the crisis’s likely impact on the Belt and Road Initiative. On infrastructure development, a recently signed contract for a power project in Indonesia’s nickel heartland may point toward a possible loophole in  China’s “no new coal power” policy.

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


In an unusual social media encounter last week “British Prime Minister”, the official Weibo account of 10 Downing Street, posted on Tuesday Feb 15, in Chinese: “We are on a cliff edge. But President Putin still has time to take one step back… The Russian government should avoid a decision that would bring catastrophic outcomes to the country.” By Friday it had received over 1.5 million Likes and 69,000 retweets.


The post brought the Ukraine crisis to the Chinese-language internet in an unexpected way. Until then, the issue had been cautiously covered by the media following official lines, given the delicate balance China needs to maintain among Russia, Ukraine, EU and the US. One day before “British Prime Minister” posted on Weibo, Foreign Ministry spokesperson Wang Wenbin told the press that China’s position on the Ukraine situation was consistent: “All sides should return to the Minsk II agreement… and strive to resolve the crisis through dialogue and negotiation.” He also stressed that the parties involved should refrain from hyping the crisis and sensationalizing it in the media.


But a war of words had already started on Chinese Weibo, demonstrating that the “parties involved” share a concern for Chinese public opinion on the issue. Responding to 10 Downing Street, the Russian Embassy in China posted on Wednesday: “Russian forces are stationed inside Russian borders, posing no threat to anyone… NATO countries providing weapons to Ukraine and supporting military development there are escalating the situation.”


Looming large in the Chinese conversation about the Ukraine crisis is the country’s status as a BRI MOU signatory. There is a strong presence of Chinese trade and energy interests in Ukraine. Reporters were already calling up Chinese publicly listed companies about their exposure to the crisis. A few wind energy companies responded to such inquiries: Longyuan Power claimed that its 76.5MW wind project in Odessa was not at all affected by the situation. But Taisheng Wind Power told the media that its project in Ukraine was on hold at the request of its Ukrainian developer. It’s unclear which project the company was referring to. Beiken Energy Engineering, an oil & gas exploration service provider, told China Securities Journal that its Ukraine operation, accounting for over 23% of its revenue, was not affected.

Chinese companies investments and construction contracts in Ukraine, 2013-2021
AEI China Global Investment Tracker.


A key project that many are watching is PowerChina’s massive 800MW wind farm in Donetsk, branded as Europe’s largest onshore wind project. The EPC contract was reached in 2020 (with Ukraine’s WindFarm LLC), but up to July last year, PowerChina claimed that the contract had not been activated as financing for the project had not been fully secured by the developer. The tense security situation in the region was also cited as a factor. 

At least for now, China is trying to keep the Belt and Road open to and from Ukraine. On Feb 10, a freight train loaded with consumer products and electronic equipment set off from Jinhua, Zhejiang province for Kiev. In a few weeks time, this China-Europe Express freight line is expected to bring back timber and minerals from a country overshadowed by a cloud of war.

This week's highlight projects

 

Indonesia: Is a new coal power plant being built on Obi Island?


An article on BRProject last week stated that Energy China and Tianjin Electric Power Construction Company recently won a tender for a 4x380MW “power island” project on Obi Island in Indonesia’s North Maluku province. The project is located in a laterite nickel and cobalt mine, invested in by Chinese company Lygend and Indonesia’s Harita Group.


The BRProject article states that the “power island” project will “solve the issue of the nickel and cobalt industry’s electricity demand.” An earlier piece of Chinese media report revealed that the Lygend/Harita Obi Island project will include a 4200MW coal fired power plant. 


In short, this power island project looks very much like the component of a new coal power plant project. If this is the case, how it fits with China’s pledge to stop building coal fired power plants abroad is a pressing question. Experts have long considered captive power plants (off-grid projects that mainly serve as power sources for industrial projects) an ambiguous area for the pledge.


The article on BRProject is low on detail. If any of our readers have any more information on this project, please let us know. It could be another important case in understanding the exact scope of China’s no-new-coal policy overseas.


Background: The Obi nickel and cobalt project is a USD 1.05 billion project which aims to bring to market 160,000 tonnes of nickel sulfate and 20,000 tonnes of cobalt sulfate per year after the completion of the first phase, and up to 240,000 tonnes of nickel sulfate and 30,000 tonnes of cobalt sulfate per year after the completion of the second phase. The project uses the high-pressure acid leach (HPAL) method of mineral extraction from laterite ore, an energy intensive process.

Other project & corporate updates


Myanmar: Gas power project moving ahead


According to Chinese media reports, on Feb 7 Power China broke ground on a permanent camp for the 135MW Kyaukphyu Gas Fired Combined Cycle Power Project in Rakhine province. The camp will include an operation center, a dining center, an administrative center and other facilities. 


A bit of history: On Feb 18 a year earlier, the company published a press statement announcing that construction of the project had “comprehensively begun”. Other reports later last year revealed, however, that the project’s insurance against political violence failed to come through in the wake of the coup which also began in February. The same article reported that another insurer was found at the last minute, but clearly not everything has gone smoothly for the project over the last year.


In last week’s article on WeChat account BRProject, the Kyaukphyu is described as having “overcome all sorts of unfavorable factors”, without going into detail about what specifically has caused the delays.


The Kyaukphyu gas fired power project is the first Chinese invested and constructed gas power project in Myanmar.

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 pandapawdragonclaw@gmail.com
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