Chinese energy firms look to Africa

A reduction in domestic energy demand has prompted China’s second-largest power producer, China Datang Corporation, to explore investment alternatives in the African market, the Bloomberg news agency reported. With this aim, the company recently signed an agreement with the Chinese government-backed China-Africa Development Fund.

Due to the global recession, Chinese exports have decreased significantly, causing a slump in domestic electricity demand. To address this loss, Chinese generators — such as China Datang — have turned to overseas areas with development potential.  

Africa needs an estimated US$300 billion over the next 20 years to build the energy infrastructure required to sustain the continent’s economic growth. Investing in the African market would help Chinese energy producers compensate for lost demand and help ensure growth in Africa.


The US$5-billion China-Africa fund was created to help Chinese companies invest in the continent. Shenzhen Energy Investment Company may partner with the fund to build a 1.03 billion-yuan (US$151 million) gas-fired plant in Ghana. Sinohydro Corporation was awarded a contract this year to construct a hydropower plant in Kenya.


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