China’s Green Energy Investment in Kenya, Ethiopia and Tanzania: Implications for Aid Policy

Sub-Saharan Africa (SSA) countries deal with multiple challenges in the transition to a modern and sustainable energy system. The countries are faced with severe shortage of energy supply after nearly two decades of fast-growing economic activity. The energy challenges are often exacerbated by unsatisfactory services. China’s development financing (among other donors) in infrastructure development has been handy in alleviating the energy challenge in SSA. In this chapter, we examine China’s energy finance in Kenya, Ethiopia and Tanzania as case studies. The Chinese development finance has been however split to several other sectors such as transport infrastructure, manufacturing, construction, agriculture and tourism industry. Characteristically, Chinese development support has been channelled in sectors that Western development partners have shown reluctance to engage. The green energy finance benefitted sectors that ranked high among the flagship projects across the Eastern Africa countries. Even with a multiplicity of donor support, the Eastern Africa region faces myriad challenges in transitioning to modern and sustainable energy systems. Our analysis points to the need to re-examine the debt policy in order to optimize on both the technological and economic benefits of Chinese financial flows to the energy sector.