Tashkent: Central Asia's largest wind power project, with a capacity of one Gigawatt, came online earlier this year. Built by the state-owned China Energy Engineering Group (CEEC), funded with European debt, and packaged by Saudi developer ACWA Power, the Bash-Dzhankeldy project represents a new model for international cooperation under China's Belt and Road Initiative (BRI). This model raises questions for Brussels regarding credit allocation when the European Union provides the funding.
According to Global Voices, CEEC has positioned this project as a flagship of the BRI that aligns Saudi Vision 2030 with China's infrastructure-building ambitions, promoting the wind farms through state-media. The project is supported by two syndicated loans arranged by the European Bank for Reconstruction and Development (EBRD), each involving a USD 150 million loan on the EBRD's account, in addition to B-loans syndicated to other lenders, including French and German state funds. While EU institutions hold a 54 percent stake in the EBRD, it operates independently, with shareholders like China holding a minor stake.
The EBRD is reviewing its public procurement policies, but its current independence highlights the limitations of Brussels' influence. Consequently, EU-funded projects can be executed by Chinese firms. In the past five years, Chinese firms have secured 13 percent of EBRD public-sector contracts by value, compared to 35 percent for EU contractors across its 38 operating countries.
Elena Kiryakova of the Overseas Development Institute notes a global shift toward China co-financing projects with multilateral development banks. Since 2016, Chinese lending through its policy banks has decreased, driven by caution towards high-risk financing. Yunis Sharifi from the China Global South Project observes that host countries prefer investments over debt, leading to more equity involvement from Chinese firms and increased international collaboration.
Chinese state financial interests remain active in Uzbekistan. The Silk Road Fund, a key BRI equity vehicle, owns a significant stake in ACWA Power's RenewCo platform. As of July 2024, China Southern Power Grid owns a 35 percent stake in the Bash-Dzhankeldy project. According to Naser al-Tamimi of the Global Institute for Strategic Research, clean energy is crucial to China-Saudi cooperation, aligning Riyadh's Vision 2030 with Beijing's green Belt and Road ambitions.
Saudi Arabia and China are expanding clean technology partnerships into Central Asia and Africa. In Uzbekistan, ACWA Power and the UAE's Masdar dominate renewable energy projects. Since 2019, Uzbekistan has signed numerous power-purchase agreements for solar and wind projects, with a significant portion awarded to ACWA Power and Masdar. Chinese firms have also gained a substantial share of engineering, procurement, and construction contracts, often backed by European public finance.
This collaboration between the Gulf, China, and Europe is also evident in Africa, such as in Egypt's wind project involving ACWA Power and PowerChina. Despite the benefits for host nations and China, the cooperation challenges the EU's narrative of competition through its Global Gateway initiative. Phil Cole of WindEurope highlights concerns over European funding for Chinese-made turbines, warning against repeating the solar industry's decline due to cheaper Chinese exports in the early 2010s.