News

  • “Ethiopia opens 300 MW dam, starts producing 80 MW,” Reuters, 18 November 2009; Brady Yauch, “Ethiopia’s Tekeze dam limps into operation,” Probe International, 23 November 2009 (via International Rivers).

The Tekeze Dam, built at a cost of $356 million by the China National Water Resources and Hydropower Engineering Corporation, has started operation. Probe International criticizes the project as wasteful and environmentally unsound (danger of landslides). Gezhouba and Sinohydro have agreed to build two of the six other planned hydroelectric projects: the $408-million Genale Dawa 3 hydropower project and the $555-million Chemoga Yeda hydropower project, respectively.

Arrest warrants have been issued for more than 10 Chinese construction workers rom the Kamchay dam worksite suspected of assaulting two Cambodian traffic police following a dispute. Shu Jiang, Sinohydro’s deputy managing director, suggested that the police may have demanded money. (There have been several violent incidents between Chinese and Cambodian dam workers in the past, and the dam’s general manager had not been satisfied with police action in these cases. In at least one case, the dam’s management decided to take justice in their own hands by sending a team of workers to a Cambodian assailant’s house. — MqVU)

Ecuador and Sinohydro have signed a contract for the construction of the Coca Codo Sinclair hydropower plant (see March 24). Sinohydro will finance 85 percent of the Coca Codo Sinclair’s construction through the Export-Import Bank of China. The project will cost $1.97 billion. The article reminds readers that in July, Ecuador’s state-run oil firm, Petroecuador, signed an agreement to sell crude to China’s state-owned PetroChina (PTR) for two years, and received an advance payment of $1 billion. Quito is also negotiating with Beijing on a separate $1 billion credit.
 

 

  • Barry Malone, “Ethiopia signs windfarm, dam deals with China,” Reuters, 23 September 2009 (via International Rivers)

Ethiopia’s electricity company signed a contract with China Gezhouba Group Company to build the $408 million Genale Dawa 3 hydropower project and another with Sinohydro Corporation to construct the $555 million Chemoga Yeda hydropower project that will be made up of five dams on five rivers. EEPCo has also signed a preliminary agreement with the Hydrochina company for the construction of two wind farms, reserved for emergencies and wholly financed by the Chinese government.

 

 
 
 

  • Franz Wild, “China’s Sinohydro in Talks to Build $300 Million Dam in Congo,” Bloomberg, 21 September 2009 (via International Rivers)

 

Sinohydro is in talks to build the Zongo 2 hydroelectric plant in the western Bas-Congo province,worth about $300 million. Sinohydro is also part of a group of Chinese companies that are investing $9 billion in infrastructure and mining in Congo in exchange for mineral rights.

Employees of Sinohydro contracted to build the Pula dam at Dikgatlhong complain that Chinese key posts are occupied by Chinese who “seem to know little about their job” and “barely understand a single word of English” so that “the safety and the life of workers at the project have been subjected to great danger”  while “hundreds of skilled Batswana from tertiary colleges were roaming the streets…  Another thing the employee alleged is that the workers are not insured. … Dikgatlhong Dam Project Manager, Jing Jinke has rubbished the recent allegations adding that the workers who gave the information were just being a nuisance.”

 

  • “China’s Sinohydro has deal for Cameroon dam project,” Reuters, 31 August 2009 (via International Rivers)

Sinohydro has reached a preliminary agreement to take over the Memve’ele hydropower station in southern Cameroon. Sinohydro is replacing Globeleq/Sud Energie, a British firm that backed out of the project, due to cost 556 million euros ($795 million). According to a manager, “The British firm was to execute the project on BOOT condition, which means they were to build, own, operate and transfer to Cameroon after 20 years. The Cameroon authorities considered this time too long.”

Ghana’s Minister of Environment has “directed the Bui Power Authority (BPA) to submit to the ministry within three months all documents covering the construction” and the environmental and local impact assessment, explaining that the previous government (whose term ended in January) had not carried out sufficiently broad consultations on the project. “Mr. Jabesh Amissah-Arthur, Chief Executive Officer of BPA, disclosed that 1,216 local people had been affected by the project,” which is carried out by Sinohydro. “He explained that some of the affected communities had been resettled and those left were expected to be resettled by the end of the year.” The local chief, Nana Sito, the Omanhene of Banda, ”said the construction of the dam has brought about a number of social and environmental problems” and “expressed concern about the indiscriminate manner the Synohdro [sic] Corporation was using natural resources in the area without the permission of the traditional council and the people. … Nana Sito expressed worry about the spate at which people were ‘hired and fired’ by the company and cited an instance when a worker got injured but was ignored by the employers. He noted that most of the workers had been working for the company for almost two years but were still regarded as casual labourers.” The new Ghanaian government is seen by some as less free-market oriented, and the new president has been reluctant to move into the Chinese-built presidential palace, saying it was too lavish (though according to others the real problem with the building is that it is seen to have too much magic).

The agreement was signed between Pakistan’s Ministry of Water and Power and China’s Three Gorges Project Corporation in the presence of President Asif Ali Zardari, who has ”sought Chinese assistance in hydel, thermal and
solar power generation projects. … Zardari said China would be the world’s next super power in trade and investment and hoped that Pakistan would become a gateway for Chinese exports to world markets through its ports.

  • “Magwagwa dam implementation plans underway,” Kenya Broadcasting Corporation, 17 August 2009 (via International Rivers)

An MoU has been signed between the Kenyan government and Sinohydro on the Magwagwa Dam Multipurpose Development Project.

  • “Sinohydro, EDL Agree To Build Two Hydro Power Plants In Laos,” Energy Business Review, 14 August 2009 (via International Rivers)

Sinohydro and Electricite du Laos (EDL)  have signed an agreement to build two hydropower plants, Nam Kham 2 and Nam Kham 3, on the Nam Kham river north of Luang prabang,  and a power transmission line from Xiengkhouang to Luang Prabang. The contract is valued at around $559 million. The two hydropower projects may cost around $430 million.  

Reports claim that “roughly 120 Belizeans have been gradually let go for imported Chinese labour” on the $ 105 million Vaca Dam project, allegations disputed by the developer, the Belize Electric Company Limited (BECOL). BECOL, owned by Canadian company Fortis, contracted Sinohydro to build the dam. Sinohydro has been involved in the construction of another dam in Belize, the Chalillo dam, which has been controversial because of environmental issues. BECOL says that the company currently employs 150 to 160 Chinese and 350 to 400 locals, in accordance with the contract that stipulates that Chinese workers will only be brought in for skilled jobs. But a former worker contends that he and four others were fired  to bring in Chinese and Nepalese workers, the latter at wage of US$5 a day, much lower than local wages. (According to the US government’s Trafficking in Persons report, the Nepalese workers were “trafficked” because their documents were withheld by the employer.) In January 2008, about 150 workers protested against low wages. BECOL’s manager said that “Belizeans tend to walk off the job, some claiming that they work too hard for the wages paid.” The interesting twist is that the current employer of the fired worker, who alerted the newspaper, is a retired US judge who now lives in Belize.

  • Ralph Nkomo, “Zimbabwe, China sign US$5 billion deal,” The Zimbabwe Guardian, 3 July 2009 (via International Rivers)
Zimbabwe has signed a US$5 billion loan deal with China’s Eximbank, securing half of the amount the power-sharing government needs “in delivering its Short Term Emergency Recovery Programme (Sterp).” The loan will be used to “boost capacity in agriculture and other key sectors such as mining, tourism, construction and public works.” This is “the largest deal that has ever been signed between the two countries and is secured on various mining and infrastructural development rights,” including equity in a US$40 billion platinum concession. Separately, Prime Minister Morgan Tsvangirai “announced that Zimbabwe had secured a US$950 million credit lines from the Chinese government.” The deal shows that China is unlikely to lose any positions in Zimbabwe in the post-Mugabe era despite its long-time relationship with Mugabe. In contrast, the article notes that “[t]he West has has not been forthcoming with aid preferring to adopt a wait-and-see approach until ‘certain benchmarks’ are achieved.” A recent fundraising trip by Tsvangirai to Western capitals “brought home pledges of a modest US$200 million.”  

Italian company ELC has won the tender for the upcoming hydroelectric power project planned near Debre Markos on the Chemoga-Yeda river in Ethiopia. The dam will be constructed by a Chinese company, Hydro Electro [probably Sinohydro?] for a total cost of 300 million dollar. The funds are most likely to come from a loan from the Chinese Export Import Bank.

This article confirms that a new set of environmental guidelines for overseas investments will soon be approved (see below, 18 March). These will stipulate environmental impact assessment before projects start; inclusion of environmental protection measures such as sewage and waste treatment facilities in all projects; observance of international environmental treaties China has signed and host countries’ or China’s environmental rules, whichever is stricter; as well as compensation for any damage to “the ecology.” It is this last measure that is new and significant, as it makes Chinese companies potentially “suable” by foreign plaintiffs under Chinese law.

Papua New Guinea’s acting Prime Minister Puka Temu apologised for attacks on Asian businesses last week. ”PNG police have shot four looters in the Highlands region while in Lae, PNG’s second biggest city, two looters were killed. The trouble started in the capital Port Moresby last Wednesday when an anti-Chinese protest ended in violence and looting. In the same week, PNG workers clashed with management at the Chinese-run Ramu nickel mine in Madang Province, on the northeast coast, after a worker was injured by a tractor.” The article claims that “many in PNG feel an influx of ‘new Chinese’ has squeezed them out of small-scale business. Others complain about working for ruthless Chinese bosses who impose tough conditions.”

  • Reuters, “Mozambique to start building $2 billion dam in 2010,” 15 May 2009 (via International Rivers)

The Export-Import Bank of China (China Exim Bank) is financing the construction of the Mpanda Nkuwa dam. The total $2.3 billion loan package also includes funding for a transmission line from the dam site to the capital, Maputo. According to Africa Energy Intelligence (No 605, 27 May 2009 ), environmental activists from the NGO Justica Ambiental “travelled to Shanghai in 2007 in the hope of dissuading Chinese promoters of the scheme from proceeding with it.”

  • Andrew E. Kramer, “Kazakhstan Bank Stops Repaying Foreign Debt,” New York Times, 25 April 2009

In the same week as the largest bank of Kazakstan, BTA, announced that was defaulting on $11bn of debt, the national oil company agreed to form a joint venture with a subsidiary of China National Petroleum Corporation in return for $10bn of Chinese loans.

  • “Revenge for Sinohydro,” Africa Intelligence, 21 April 2009 (via International Rivers)

Sinohydro won a bid to build the Zongo-2 dam in Congo-Kinshasa, for $ 350 million, with China paying the whole tab, after having lost out on the contract for the Katende dam to India’s Bharat Heavy Electrical (BHE). Sinohydro has been active in mining copper and cobalt in Congo since 2008, forming part of the Groupement d’Entreprises Chinoises (GEC) that also counts the China Railways Group and China Metallurgical Group

The authors of this leading article in the NYT note that in recent weeks, China has been negotiating deals to double a development fund in Venezuela to $12 billion (the fund was established in 2007 with $6 bn, intended for various infrastructure projects carried out by joint venture companies), provide Argentina with access to more than $10 billion in Chinese currency and lend Brazil’s national oil company $10 billion, in addition to the Ecuador dam deal reported here earlier. The authors conclude that ”the deals largely focus on China locking in natural resources like oil for years to come. The $10 billion arrangement with Argentina “would allow Argentina reliable access to Chinese currency to help pay for imports from China” and “follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.”

  • Sinohydro gets EUR 282-mln hydroelectric project in Togo, 27 March 2009

International Rivers reports that Sinohydro (the largest hydropower engineering and construction company in China) won a tender for the 282 million euro Adjarala hydroelectric project on the Benin/Togo border. When complete, it will be jointly owned by both countries.

  • Global Environmental Institute: Environmental Conduct of China’s Companies Overseas Will Be Regulated, 18 March 2009 (via International Rivers) www.geichina.org/index.php?controller=News&action=View&nid=74

After disseminating the findings of a “Research on Environmental Policies of Investment and Aids [sic] Overseas,” the Chinese Ministry of Environmental Protection, the Ministry of Commerce and the People’s Bank of China announced a plan to issue Guidelines for Environmental Conduct Overseas for Chinese companies as part of the Integrated Policy Packages for Overseas Chinese Enterprises Project (IPP). The IPP project is being implemented by the Global Environmenal Institute, the Chinese Academy of Environmental Planning (of the Ministry of Environmental Protection) and the University of International Business and Economics. “Its aim is to
develop a comprehensive set of guidelines for Chinese companies to
improve their environmental impact overseas. In implementing the IPP
project, GEI seeks to work alongside local NGOs in some of the hottest
areas for Chinese overseas investment in doing case studies by
selecting pilot companies to follow the guidelines.”

  • Yu Hongyan, “Sinohydro wins $300 million order in Sudan,” chinadaily.com.cn, 6 March 2009 (via Internati0nal Rivers)

Sinohydro announced it has won a $300 million order to build 486 km of roads in Sudan.

The foundation stone has been laid for Costa Rica’s new national stadium, donated by China. Costa Rica broke diplomatic relations with Taiwan in 2007.

Two Chinese-Ecadorian joint ventures, Sino-Ecuador (Gezhouba) and Sinohydro-Andes JV, were the only ones to submit bids to finance some 80 to 85 percent of the total money needed tobuild the Coca-Codo-Sincalir hydroelectric project. The project is expected to cost 2 billion U.S. dollars and to generate 35 percent of the total electric power the country needs when it turns into operation. The main creditor to Sinohydro will be the Eximbank, but Xinhua has reported that Ecuador’s president Rafael Correa also discussed financing with the China Development Bank.

  • Xinhuanet, “China Three Gorges Corporation to Accelerate the Pace of Hydropower
    Projects     Overseas,” 22 February 2009 (translated by International Rivers)

China Three Gorges Corporation, China’s largest hydropower enterprise, has signed a construction agreement with Malaysia Sarawak Energy Corporation last October and a cooperative MOU on hydropower project
development with Pakistan this January. In December 2008, “to enhance China Three Gorges Corporation’s overseas expansion capacity,” the company was reorganized and renamed China Water Investment Group Corporation (China Water Investment). “China Water Conservancy and Electric Power Foreign Company (China Water and Power), which has extensive overseas experience in hydropower project construction and management, was established as a wholly-owned subsidiary of China Water Investment.” It is a common practice for state enterprises to split off foreign-based subsidiaries that act as private entities that can raise capital on stock exchanges, while the mother company remains under government control. ”China Water and Power’s 2008 turnover of 1.2 billion U.S. dollars makes it one of the world’s largest 200 international engineering consulting design companies. Its current projects are located in Asia, Africa, Europe, the Americas; in total, it has projects in 25 countries and regions.”

East Timor’s parliament voted down a government proposal for a $390 million project to build two oil-fueled power stations, tendered to Chinese Nuclear Industry 22nd Construction Co, on the basis that it would “would entail a withdrawal beyond the amount permitted by existing laws governing the country’s oil revenue-financed sovereign wealth fund.” The article evaluates this as a failure of China’s economic diplomacy in the region. Crook notes that China has financed a new building for the Ministry of Foreign Affairs and

an elaborate new presidential palace is on the way.  … In a seeming quid pro quo, Chinese investors may obtain 50-year land leases in East Timor, where most other foreigners are limited to 30-year deals. That’s encouraged Chinese investment, witnessed in the growing numbers of Chinese-run businesses in Dili ranging from electronics stores to restaurants to bars.  

This long article claims that, among the tens of thousands of officials wanted in China on corruption charges, those moving to Southeast Asia are relatively easy to capture because of local governments’ cooperation and the ability of the Chinese police to carry out direct activities. This reminds me of a case in the late 1990s when a Chinese police  team came to Hungary and places ads in local CHinese newspapers encouraging readers to report criminals directly top them so they would be caught and transported to China. (The news raised a bit of a furore in the Hungarian media.) More recently, there have been intermittent claims by human rights groups that Chinese dissidents or Falungong activists have been caught and extradited in Cambodia.

According to this article, Hong Kong-listed Datang, “China’s second-biggest power producer,” has announced that it “plans to explore  the African market as the global financial crisis slows domestic demand for electricity.” Datang is currently building the Stung Atay hydropower station in Cambodia as a contractor for Yunnan International, which in turn has a contract with the Cambodian government. 

  • We have updated the Bibliography (Working Paper 1) on 18 January 2009.

It seems that the recession is indeed providing an opportunity for China and its companies to rethink the regulation of overseas projects. This document establishes guidelines for economic, social and environmental responsibility.

This site — run from where? – has a list of Chinese (as well as Thai, Indian and other) companies involved in dam construction in Burma. It reports on the social and environmental impacts and threats of dams as well as the accompanying militarization of the areas of construction. Interestingly, it is not explicitly political, has no content on the junta and no links to opposition websites.

A Peruvian newspaper reports that an unnamed Chinese company wants to build a railway from the town of Iquitos, in the Amazon region, to the Atlantic coast, as well as to upgrade the port of Iquitos and to build a power station in the district of Mazán. Both locations are in the province of Loreto. The article does not explain why the company is interested in this, but it is likely that Amazonian timber and other forest products are at play. Several Chinese railway projects have been announced in the past decade in South America, but to my knowledge none has yet been completed. 

Ecuador’s president, Rafael Correa, announced that he was close to an agreement for a $1.7 billion loan from the Chinese government to finance the construction of the country’s largest hydroelectrical plant, Coca-Codo-Sinclaire, in the Amazon region. In addition, the president said that China is ready to take part in
the construction of the Pacific Refinery in the coastal province of Manabi, carried out by the state-run oil firm Petroecuador and Venezuela’s corresponding company, PDVSA. He also said that the Chinese cooperation offer included road construction, a package model familiar from Africa.