Africa needs reliable electricity, and China's offer of renewable energy projects is enticing. But could flooding the market with cheap reneawables decimate homegrown businesses?
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00:00Let's look at China's latest pitch to Africa's leaders.
00:0330 clean energy projects, 1 million jobs, and financial aid of $50.7 billion in the next three years.
00:12Sounds great, right? Especially the clean energy part.
00:15After all, even big African economies like South Africa and Nigeria desperately need reliable electricity.
00:23But if it's so great, why have the European Union and the United States imposed
00:29massive trade tariffs on Chinese renewables, from solar panels to electric vehicles?
00:34Welcome to the Flipside.
00:37Green transition, green energy is going to be a big part of China-Africa relationship in the future.
00:43And especially since many African countries are facing energy deficits that's impacting the development process.
00:51You see, almost 1.4 billion people live on the African continent,
00:56and 70% of people in sub-Saharan Africa are under the age of 30.
01:01That's a massive market for the future.
01:04China recognizes this, and that's why its trade with Africa has grown by about 17% each year since 2000.
01:12And could it be that renewables are the next frontier?
01:16China will be able today, by providing those source of energy and those source of solution,
01:21to be and to even strengthen its position as Africa's main economic and trade partners.
01:27China will also be selling its own product.
01:29Wait, surely that can't be good news for Africa's own fledgling renewables industries.
01:36After all, most trade deals with China have conditions.
01:40Often, that Chinese technology should only be used with other Chinese products.
01:44There definitely is this concern that China's green energy push in Africa
01:48could undercut local energy industries, especially in Kenya.
01:52China has this ability to fund these large-scale projects at low cost,
01:56which makes them competitive and can definitely overwhelm local companies.
02:02South Africa, for instance, recently introduced 10% import tariffs on solar panels to protect local industry.
02:10Or African renewable energy companies could copy China's own playbook.
02:15If played correctly, what Kenya could do is have these Chinese companies come in,
02:21as they already are, China's heavily involved in geothermal in Kenya,
02:26and teach local players how to run their own energy industries.
02:32That's the flip side.