Modes And Strategies For Hydropower Projects Development By Chinese International Contractors In Sub-Saharan Africa

The United Nations initiated the "Sustainable Energy for All Initiative" in 2012,with the goal of achieving universal access to modern energy worldwide by 2030.Hydropower plays an important role in Sub-Saharan Africa’s(SSA)energy poverty alleviation as a strategic choice for electricity generation.However,the current level of energy access in Sub-Saharan Africa is still relatively low,despite its huge untapped hydropower potential.The main objective of this research was to analyze the Chinese government financing for hydropower projects and to determine strategies to improve the competitiveness of Chinese International Contractors(CICs).The research goals and results are as follows:(1)Investigate the impact of Chinese government loans on energy financing in SSA countries.This dissertation contributed to the existing literature by extending the research on the relationship between "Foreign Direct Investment(FDI)-economic growth-energy" to the analysis of the impact of Chinese loans.In order to ensure the robustness of the results,a variety of panel estimation models were used,including one step and two steps difference Generalized Method of Moments(GMM),two-stage least squares estimation(2SLS),fixed effect and random effect estimation.The results showed a consistent positive relationship between FDI and Chinese government loans in the one hand and a unidirectional causal relationship from electricity consumption to FDI in the other hand.The learning effect associated with FDI was also confirmed for Chinese government loans,suggesting that Chinese government loans introduce energy efficiency technologies into the host countries.(2)Explore the advantages and disadvantages of hydropower financing modes through multiple case studies.The SWOT analysis revealed that,despite environmental impact management issues,the Chinese government’s financing mode is relatively less complex than other financing modes and reaches rapid financial closure.Furthermore,Chinese International Contractors facilitate access to Chinese government financing,and the availability of the funds through the Belt and Road Initiative,makes it appealing to host governments.(3)Identify the key risk factors that affect Chinese investment and construction of hydropower projects in SSA.Based on the detailed database established,an analytical hierarchy process(AHP)and regression analysis were carried out.The negative correlation between export to China and the exchange rate indicated that the terms of the loans are subject to market fluctuation because the payback agreement are signed at a fixed rate.The research showed that the risk of cost overruns varies from country to country,but schedule delays can be predicted by the electromechanical characteristics of the hydropower plant(capacity and head),and more specifically by the capacity.(4)Establish a capital expenditure(CAPEX)estimation model for hydropower projects constructed by Chinese international contractors in SSA.The model was dependent on the capacity and head.Built from a bootstrap resampled dataset and validated by a high coefficient of determination,the model can serve to provide a comparative reference for solving common problems such as cost overruns caused by inaccurate bidding proposals.A comparative analysis of the results showed that Chinese-financed and constructed hydropower projects have fewer schedule delays and cost overruns than projects funded by multilateral development banks.(5)Construct a financing framework for hydropower projects in SSA by Chinese international contractors.Based on the case study of the Adjarala hydropower project,the novelty of this model resided in combining corporate financing and project financing in order to maintain a low and stable electricity price,considering that natural resource exploitation,and sales of electricity will serve debt repayment.Furthermore,the natural resource will not be directly exported to China but will rather be exploited by a private company in charge of debt issuing.Cross-currency swap and interest rate swap were introduced in the model to avoid costly currency rate fluctuations.Multilateral Development Banks were integrated into the framework for the study and mitigation of Environmental Impact Assessment.This work provided an overall structured,methodological approach for the financing and construction strategies for hydropower projects in Sub-Saharan Africa,and could be extended to other infrastructure projects in general.