In the last two decades, Chinese state lenders have been responsible for $153 billion in loans to African countries. Acknowledging assertions in the literature that this lending has had tangible negative effects on debt sustainability in several of those African countries, my research project analyzes the effectiveness of this lending in improving welfare through the financing of energy projects. This represents a first step in answering the broader question of whether official Chinese lending to African nations, in its current state, is worth the accompanying risks.
Combining data from Horn, Reinhart, and Trebesch (2021), William & Mary's AidData Initiative, and other macro-level datasets on national electrification, I build a comprehensive picture of Chinese lending to African energy generation projects, as well as the long-term success of those projects and their effects on national energy outcomes. My analysis will be based in part on descriptive statistics generated from my dataset and in part on an econometric analysis run on the dataset that factors in costs, energy output, and national debt and labor metrics.
This research is expected to yield the result that while Chinese investment is largely effective and prioritizes sustainable energy generation projects, opportunities exist for more accommodative lending practices and greater domestic labor involvement in project implementations.