China Stakes Its Claim in Latin American Energy:

Across Latin America and the Caribbean (LAC), loans and investments from the People’s Republic of China have financed an impressive array of projects in infrastructure, energy and mining. Energy projects include oil, gas, electric power generation and transmission, renewable energy and strategic minerals. minerals. Amounting to more than $58 billion between 2000 and 2019, these funds were supplied by China’s state- owned banks and corporations, plus China’s Belt and Road Initiative (BRI), a long-term, international investment program. Chinese private companies, which often receive financial support from the government, provided additional funds. On top of figures available to the public, the Chinese government likely furnished unknown sums in off-the-books financing to the region. China is a major energy player in LAC. According to China’s Global Energy Finance database at Boston University, the country committed $58.4 billion to LAC’s energy sector between 2000 and 2019. Of the total, 83% went to projects in oil and natural gas, 12.8% to hydroelectric power, 2.2% to solar, 1.5% to “unspecified” and less than 1% to coal, wind and biomass combined. BRI energy projects were part of the total between 2017 and 2019, with 56% of BRI outlays going to oil and gas, and 39% to renewables.

But there are potential risks. The long-term impact of Chinese government funding to Latin American nations is far from clear. What is the real cost of the debt secured for energy projects across the region and the resulting social, labor, environmental and governance issues? Real debt levels are unknown, since China often does not reveal details of its financing arrangements. China typically requires that projects receiving Chinese money exclusively purchase Chinese-made materials and equipment, use Chinese professional services and Chinese personnel, creating friction with regional manufacturers and workers. The Asian superpower has been successful in expanding its presence in LAC energy, mining, trade and other sectors by supplying abundant soft loans, investments and other types of financing from government banks, the massive BRI initiative, state- owned companies and private Chinese firms. It also furnishes regional countries with some of the world’s most advanced technology – such as solar and wind power systems – at highly competitive prices. Chinese credits and investment generally are welcomed as alternatives to private financing sources or to fill budget gaps. They were particularly welcomed

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