For bio energy provider Guangdong Zhongke Tianyuan New Energy Technology (ZKTY), Africa is a wonderland.
At the 2nd Investing in Africa Forum that concluded on Thursday, the Guangzhou company signed a contract to invest in a bioenergy project in West Africa’s Sierra Leone.
The project, which uses local crops to produce ethanol and generates electricity using the crops’ remnants, is expected to bring returns for ZKTY and increased income for local farmers.
“Green development is a trend not only in China but in Africa,” said Yu Junwei, chairman of ZKTY. “Africa has so much biomass resources that we can take advantage of.”
Like ZKTY, an increasing number of Chinese firms are betting on the future of renewable energy in Africa.
According to a report by United Nations Environment Program, Chinese investment in renewable energy climbed 17 percent in 2015, making it the largest investor in renewables in the world. Much of the money flowed into Africa. From hydropower projects to bioenergy plants, Chinese companies are moving beyond investments in traditional oil and gas.
According to a 2016 report by the International Energy Agency, power plants and grids built by Chinese companies in Ethiopia, with almost 1.5 gigawatts in generation capacity, are 100 percent renewable energy.
The energy sector is essential to productivity and developing local business capacity. Private investment is vital – both foreign and domestic – to finance African infrastructure and bring affordable, reliable energy to more Africans, said Jim Yong Kim, President of the World Bank Group.
Recognizing the potential for China-Africa cooperation in renewable energy, the World Bank signed a memorandum of understanding on an energy partnership Wednesday with China’s National Energy Administration at the forum.
“We hope the partnership will result in numerous co-financing of projects in Africa’s energy sectors, especially renewable energy,” said Haleh Bridi, director of external communications and partnerships at World Bank Africa Region.
China’s interest in Africa’s renewable sector is also finding support from other international institutions. United Nations Development Program, for example, has been supporting two Chinese projects in Zambia and Ghana to “ensure a more holistic transfer of renewable energy technologies from China to Africa”.
Oluniyi Robbin-Coker, Chairman of the Board at Sierra Leone Investment and Export Promotion Agency, said China’s growing investment in Africa’s renewable energy sector is very beneficial for the continent’s own development.
“In Sierra Leone we talk about ‘greenovation’, which is green and innovation. The world needs to become a greener place and we all have to manage our footprint,” said Robbin-Coker.
For ZKTY, the bioenergy project in Sierra Leone will not only generate clean fuels for the country’s auto industry, but also can help local farmers by purchasing waste from them to generate electricity.
“I think it’s a very meaningful project. It involves the whole industry chain and would be very beneficial to the local economy,” said Yu Junwei.
Nick Bridges, director of Sunbird Bioenergy Africa, which invested in the Sierra Leone project with ZKTY, agreed that the investment is a win-win.
“Africa has a lot of primary resources and China has a lot of technology and finance, so it’s really a perfect marriage to bring them all together and create prosperity for Chinese investors and African countries,” said said Bridges.