Paw Tracker newsletter (Week of Nov 8)

This week's highlight projects

Zimbabwe: Chartered flight brings Chinese workers back to Hwange power plant

A plane full of Chinese workers landed in Zimbabwe to resume work at key China-supported projects, including the Hwange power plant. The flight was chartered by Power China and carried more than 200 workers from multiple Power China subsidiaries. Zimbabwe sealed off its borders in the face of Covid-19 in April 2020, causing severe disruption to the rotation of staff members at key China-backed projects. Most of the workers had been stuck in China since the 2020 Chinese New Year in January. 

Hwange is Zimbabwe’s largest coal-fired power plant, with an existing 920MW capacity that will be expanded by another 660MW by Sinohydro (a Power China subsidiary). After completion, it is expected to meet 60% of the country’s power demand. A Xinhua report at the end of 2019 stated that progress of building the new Unit 7&8 stood at 25%, with Unit 7 expected to start power generation by Apr 2021. The global pandemic hit at a crucial time in the project’s construction, another example of how Covid-19 is affecting the unfolding of BRI.
 

Guinea: SPIC nears mining the first batch of bauxite

SPIC Aluminum and Power Investment, a subsidiary of State Power Investment Corporation (SPIC), has started the production trial of bauxite mining machineries (outsourced to a Power China-owned company) at its block 17 mining site in Guinea. 110,000 cubic meters of mountaintop surface have been cleared to make way for mining. The site is located near the border of Boke and Boffa regions, two traditional mining areas of the West African country. 

In recent years, Guinea has rapidly emerged as the world’s largest supplier of bauxite, the raw material for aluminum smelting, after major suppliers such as Malaysia and Indonesia banned bauxite export for environmental concerns. In 2015, the Winning Group consortium, made up by private Singaporean and Chinese companies, led the way in connecting Guinea’s massive bauxite deposit to the Chinese market. Bauxite export from Guinea to China rose rapidly from 1 million tons in 2015 to over 30 million tons in 2017. Afterwards, state-owned enterprises such as Chinalco and SPIC followed suit in accelerating developments in Guinea, both eyeing the Boffa region as a key production base for their presence in the country.

Other project & corporate updates

China’s two largest energy sector EPC contractors, CEEC and Power China, signed a series of procurement deals with major international manufacturers such as Siemens, GE and ABB at the 3rd China International Import Expo. The deals, worth 160 million USD for Power China, ranged from gas turbines to power grid components, highlighting how embedded multinational companies are in China’s global energy infrastructure build-up. A Xinmin Evening News report features CEEC’s strategic partnership with Siemens since 2015 in opening up EPC markets for thermal power plants, renewable energy and power transmission.  

The China International Import Expo aims to facilitate new deals to meet China's ever-booming domestic demand, and has been given greater importance under the country's new "dual circulation" economic policy.

Myanmar: SPIC win bids for five solar plants

This week it was also reported that SPIC have won five bids for solar power plants totalling 170MW in capacity in Myanmar. According to the report by power industry news outlet SolarBe, SPIC and the Myanmar Electricity Supply Corporation have already begun site investigations and social and environmental impact assessment procedures. The five projects are part of the Myanmar government’s “light up Myanmar” goal to address power shortages in the country. Power generation from solar PV is expected to play a big part in the initiative and Chinese companies, with their global leadership in solar technology and equipment production, will see a clear investment opportunity.

Talk of the Town

A new report on the image of Chinese enterprises overseas shows that slightly less than half of the respondents surveyed consider Chinese companies a “positive force” in local development. The report, jointly published by China Report, Academy of Contemporary China and World Studies and Kantar, compiles public survey results from 12 countries that have participated in the Belt and Road Initiative. Respondents in countries including Indonesia, Pakistan, Kenya and Serbia were asked questions about their perceptions of Chinese enterprises. In one of the more revealing approval/disapproval questions, a clear majority of respondents in Pakistan, Kenya, Malaysia and Indonesia shows a positive attitude toward the contribution of Chinese companies, while the public in Thailand, Russia and Italy think Chinese enterprises “pose challenges”.
 

Chinese media depict the findings of the report as overall positive. Response to some of the questions does show favorable public reception of Chinese enterprises in some aspects, such as their assistance of the host countries’ response to Covid-19. But the media also omitted results that look less encouraging. For example, a low percentage of respondents in Kazakhstan (35%), Chile (42%) and Kenya (44%) recognize Chinese companies as contributing to poverty alleviation. And overall, the respondents in Italy, a key BRI ally in the EU, show a negative attitude toward the presence of Chinese businesses. Chinese companies clearly still have a long way to go in winning the “hearts and minds” of the public in key markets they intend to explore.