Overview and Reflections on China*s Global Role in Dam Building



Overview and Reflections on China*s Global Role in Dam Building
China’s global role in
hydropower development
Overview and Reflections
London, 8 – 9 November 2012
Grace Mang, China Program Director, International Rivers
International Rivers
About us
Our work on China’s global role in dam building
China’s Global Role
in Hydropower
Why? Scale & Size, and Key Actors
Chinese companies and banks
are global dam builders
Chinese dam-building companies now have as much as 50-60% of the world’s
dam-building market.
Based on our records, over 306 projects in 70 countries. South-East Asia, South
Asia (primarily Pakistan and Nepal), Africa, Latin America and Eastern
Some trends:
Regional concentration
What types of dams, what size
New markets
What stage?
Regional Concentration
Source: International Rivers, New Great Walls (2012)
Key Actors
• Chinese government: Central Government Departments - Ministry of Commerce,
National Development and Reform Commission; Ministry of Foreign Affairs
• Chinese financiers: China Export-Import Bank, China Development Bank,
commercial banks
• Chinese dam-builders:
• Dominated by State-owned enterprises
• Sinohydro Corporation, Gezhouba, China Three Gorges Project
Corporation (subsidary China International Water and Electric
• Datang, China Power Investment, Guodian, Huaneng
Reflections on China’s Global Role in Overseas Hydropower
How can we explain the Chinese dam-building industries success?
Pull: Benefited significantly from “Going out policy,” export led growth
Push: Saturation in the domestic dam-building market and low profit margins,
Part of broader efforts by the Chinese government to improve diplomatic
What is motivating Chinese dam-builders?
Aspire to be the biggest and best dam-builders in the world
Profits and unlocking new markets
Desire to “help” countries develop
Bilateral agreements e.g. large infrastructure loans
Tendering and bidding: Chinese dam-builders are becoming more and more
competitive, access to cheap credit lines.
Going out and securing deals themselves
Free surveying and feasibility studies offered countries e.g. Argentina,
Colombia, Ethiopia, Laos
Impacts of Chinese
Overseas Dams
Transmission lines
Downstream: sediment, flow, reduced water
availability, ecological impacts
Reservoir – flooding and
indirect impacts from
May cause/exacerbate
tensions with other
Increase dependency
on other countries borrowing & finance,
buy power
Transmission construction
Socioeconomic impacts
development as a
pathway to grow other
resource intensive
Direct costs
Long term costs, long term
benefits may not last
Indirect costs – crowding out
of alternatives, balance of
payments, structure changes
to economy
Environmental and social risks
particular to the Chinese overseas
dam-building industry
Mitigating social and environmental risks is
challenging for Chinese overseas dam builders. Need
to be conscious that different project roles will lead to
different responsibilities
• In China, very rarely have responsibility for
addressing resettlement and environmental
• No implementation capacity. Lack of
specialists within companies often results in
outside consultants do environmental and
community relations work.
• Negotiating standards: low host country
standards, higher Chinese standards,
international standards.
Exacerbating factors:
- Chinese dam builders
are late to the game
- Most active in
countries where rule
of law, environmental
law enforcement is
weak or non-existent.
- Initially, minimal
standards on
environment and
community relations.
Dismiss widespread opposition to certain dam projects e.g. Myitsone Dam –
lacked the social license
Get involved in projects that are destructive, previously deemed by others as
“too hard” or fraught with difficulties e.g.
• Transboundary rivers: Mekong mainstream dams
• Widely opposed and decades delayed projects: West Seti, Nepal
• Countries with security issues and poor human-rights: Patuca dams, Honduras
• Corrupt governments and non-sensical projects: Bakun Dam, Malaysia
Adopt standards but don’t have the means of know-how as to how to implement
them. E.g. UN Global Compact, Chinese legal standards, IFC Performance
Ongoing Environmental Reform
• China Exim Bank
• Environmental Policy and Implementation
• Sinohydro’s environmental policy
• Adoption of international standards
• Implementation?
• Draft guidelines on environmental impacts of Chinese overseas
investment (MOFCOM and MEP)
• Positive examples: Belinga Dam, Gabon; Chemoga Yeda, Ethiopia,
Myitsone Dam, Burma
Why are Chinese dam-builders so dominant
despite their relatively poor social and
environmental records?
Differentiated responsibility – host country authorities are still by and large
the developers, but this is changing …
Khamchay first BOT project. Sinohydro will operate for 25 years.
Nam Ou cascade will the first time Sinohydro will have been responsible for resettlement
The first wave of dams are only just coming online – Bakun, Khamchay,
Bui dams have only just started generating power
Problems are dispersed, treated in isolation and many of the worst are still
to be realized.
Security and workers’ safety concerns in Africa
Indigenous peoples’ protest in Latin America e.g. Colombia, Honduras
Devastating environmental impacts – Gibe 3 on Lake Turkana, Mekong mainstream dams
on the Mekong Delta and fisheries, Virgin protected rainforest from the Nam Ou projects –
only on paper.
Working on China’s global role is hard!
• Contacts are critical and are time intensive to collect.
They also move on…
• The topic of overseas investments are still sensitive but not as
much as before
• A good organization name opens doors.
• Beijing-based bureaucrats are reluctant to say anything on the
record but may be more open when overseas – joint field research
can be a helpful and have been successful in the past.
• Project and company managers of overseas projects in the host
countries can be quite frank and upfront, particularly when
talking to Chinese researchers.
Thank you
Any questions or clarifications?
Contact details: [email protected]

Similar documents