Slowing the Growth of Power Outside : The Role of Chinese Finance

Morgan Hervé-Mignucci Xueying Wang

November 2015

A CPI Report November 2015 Slowing the Growth of Coal Power Outside China

Acknowledgements We would like to give special thanks to Aviva Imhof (European Climate Foundation), Joanna Messing (Growald Family Fund), Ted Nace (CoalSwarm), Ximing Peng (World Bank), Matt Phillips (European Climate Foundation), Hao Sun (International Finance Corporation), and Wawa Wang (CEE Bankwatch Network) for their thoughtful insights and opinions on China’s overseas coal finance mechanisms. We extend our sincere thanks to CPI staff members Ruby Barcklay, Tom Heller, David Nelson, Dan Storey, Uday Varadarajan, Tim Varga, David Wang, and Maggie Young, who provided guidance and support throughout the course of this project. CPI would like to thank Sonia Medina and Children’s Investment Fund Foundation, without whose generous support this project would not have been possible.

Descriptors Sector Energy Finance Region Global Keywords China, coal finance, State support, export credits, coal power

Related CPI Slowing the Growth of Coal Power in China: The Role of Finance in State-Owned Enterprises Reports Contact Morgan Hervé-Mignucci [email protected] Xueying Wang [email protected]

About CPI Climate Policy Initiative is a team of analysts and advisors that works to improve the most important energy and land use policies around the world, with a particular focus on finance. An independent organization supported in part by a grant from the Open Society Foundations, CPI works in places that provide the most potential for policy impact including Brazil, China, Europe, , Indonesia, and the United States. Our work helps nations grow while addressing increasingly scarce resources and climate risk. This is a complex challenge in which policy plays a crucial role.

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A CPI Report II November 2015 Slowing the Growth of Coal Power Outside China

Executive Summary In recent years, China has grown into a major provider countries in its “portfolio”, with multi-billion dollar of coal power finance in overseas markets, replacing projects being planned in , India, and Russia, financing by major development institutions while together representing more than 50% of the total providing potentially less stringent environmental Chinese overseas coal finance that hasn’t yet reached guidelines. In September 2015, China made a surprise financial closure. announcement that it would commit to “controlling public investment flowing” into high carbon overseas Chinese public finance and support for projects. This was followed by an announcement in state-owned enterprises November 2015 that OECD countries are committing to The vast majority of Chinese overseas coal finance to common standards for coal subsidies, also potentially date is comprised of debt associated with equipment significantly restricting international finance for coal exports and engineering, procurement and construction power. contracts, provided by policy banks like China These announcements have been closely followed Development Bank and China Eximbank as well as by the climate community, while information about Chinese commercial banks typically supported by overseas coal finance, particularly Chinese finance, has China’s export credit insurer, Sinosure. been lacking. Thanks to a new data collection effort, CPI For projects still at the planning stage, however, the has been able to identify China’s role in international portion of equity has increased significantly to more coal power generation deployment and to provide the than 20% of total Chinese financing – reflecting a most complete estimate of Chinese finance for overseas greater interest in overseas investments by Chinese coal projects to date. state-owned enterprises. Overseas public finance In absolute terms, we estimate that USD 21-38 billion and guarantees on export and construction contracts worth of Chinese finance went to overseas coal power facilitate the expansion of an overseas market and projects over the last ten years and, prior to the help the Chinese government foster its own domestic commitment, USD 35-72 billion worth was planned to economic growth and address the coal power industry’s finance new overseas projects. domestic overcapacity while working towards goals to reduce air pollution. To this end, the Chinese The USD 35-72 billion figure represents an estimated government has been providing financial and fiscal 11-21% of total overseas coal finance (after adjusting for support to companies that are expanding their overseas projects that are unfeasible and likely to be cancelled, investments, thus enabling Chinese engineering, irrespective of the recent commitments). However, procurement and construction companies to bid other nations, international investors and lenders also lower than the competition on project contracts and play an important role, with investment estimated at obtain a larger market share of overseas coal power USD 272-307 billion. By comparison, local investment development. for coal power is estimated at USD 218 billion. Of the USD 35-72 billion expected investment in Recipients of Chinese coal power finance planned projects, we estimate that the Chinese government could potentially discontinue plans to In terms of where Chinese overseas coal finance is invest up to USD 18 billion in overseas coal power. This going, we find that most of the historical Chinese is in addition to the planned projects that are unfeasible coal power financing went towards South Asia and and would not have gone ahead even without the Southeast Asia, with three countries – India, Indonesia, commitment. The role of other international investors and Vietnam – representing around 60% of the total. however is also critically important, given their even China’s focus on Asian countries is in line with its more significant role, compared to China, in financing overall direct investment trend in the region. More overseas coal projects. recently, China started diversifying the destination

A CPI Report III November 2015 Slowing the Growth of Coal Power Outside China

Contents

EXECUTIVE SUMMARY III

1. INTRODUCTION 1

2. CHINA GREW INTO A SIGNIFICANT PROVIDER OF FINANCE TO OVERSEAS COAL POWER GENERATION 2 2.1 CHINESE FUNDING OF OVERSEAS COAL POWER FOCUSED ON SOUTH AND SOUTHEAST ASIA 3 2.2 CHINESE OVERSEAS COAL POWER CAPITAL IS MAINLY DEBT TO SUPPORT CONSTRUCTION CONTRACTS & EQUIPMENT EXPORTS 4 2.2.1 Who provides the equity capital? 5 2.2.2 Who provides the debt and on what terms? 5

3. NATIONAL INTERESTS ARE DRIVING CHINESE FINANCE IN OVERSEAS COAL POWER PROJECTS 8 3.1 GOING GLOBAL ADDRESSES THE COAL POWER INDUSTRY’S DOMESTIC OVERCAPACITY AND SHIFTING PRIORITIES 8 3.2 OVERSEAS PRESENCE FACILITATES THE IMPORT OF NATURAL RESOURCES AND HELPS UNLOCK INFRASTRUCTURE CONTRACTS 9 3.3 OVERSEAS PRESENCE STRENGTHENS STRATEGIC POLITICAL TIES 10 3.4 ADDITIONAL REASONS FOR CHINESE MONEY FLOWING INTO OVERSEAS PROJECTS 10

4. CHINA EXPORT SUPPORT AND ABSOLUTE DOMESTIC COST ADVANTAGE CREATES CONCERNS REGARDING OVERSEAS COAL POWER DEVELOPMENT 11 4.1 THE CHINESE GOVERNMENT PROVIDES FINANCIAL SUPPORT TO COMPANIES GOING GLOBAL 11 4.2 CHINA IS A GROWING FUNDER OF OVERSEAS COAL POWER DEVELOPMENT BECAUSE CHINESE ENGINEERING, PROCUREMENT, AND CONSTRUCTION (EPC) COMPANIES CAN BID LOWER THAN THE COMPETITION ON PROJECT CONTRACTS 12 4.3 CHINA IS SUPPORTING DOMESTIC ENGINEERING, PROCUREMENT, AND CONSTRUCTION (EPC) COMPANIES WITH A WIDE RANGE OF TAX REDUCTION PROGRAMS 13

5. INTERPRETING CHINA’S COMMITMENT TO CONTROL INVESTMENT FLOWING TO OVERSEAS PROJECTS 14 5.1 UNCERTAINTY ON THE SCOPE OF THE COMMITMENT 14 5.2 THE LEVEL OF EFFORT: AMBITIOUS OR NEGLIGIBLE CUTS? 15 5.3 THE RISK OF OTHER INVESTORS & LENDERS TAKING OVER CHINA’S MARKET SHARE 15 5.4 CHINA’S IMPLEMENTATION PLAN MATTERS 16

6. CONCLUSION AND NEXT STEPS 17

APPENDIX 1. PROJECT LIST 18

A CPI Report IV November 2015 Slowing the Growth of Coal Power Outside China

1. Introduction Historically, public finance from Multilateral practical details of this major policy change have yet to Development Banks (MDBs), as well as national be defined – but the impact of this commitment may be development agencies and financial institutions in significant. developed countries, has contributed significantly to overseas coal power development, to provide electricity In this respect, it would be useful to better understand access at low cost in developing countries and to the scale of Chinese finance in a larger global context support exports. Institutions such as the Bank as well as the drivers and economic incentives for the for International Cooperation, the Export-Import Bank country and stakeholders involved. This paper thus of U.S., and the World Bank Group played important answers the following questions: roles in financing coal power projects. In recent years, • How significant is global coal power financing? however, the Chinese government has been increasing What is China’s role in this? its financial support of overseas coal power projects as backing from traditional lenders started to wane, • Which projects are attracting Chinese financial and has become a key player in this space. In addition support? to public finance, in recent years Chinese power • Which Chinese players are involved in these generation developers have also begun to invest directly transactions? in foreign coal power plants. • What are the main incentives for China and for In September 2015, the U.S. and China issued a joint host countries to engage in these transactions? statement highlighting China’s commitment to restrict • If China reduced overseas coal power financing, public finance to projects with high pollution or carbon would other financiers replace its role? emissions, internationally as well as domestically.1 The

1 “China – one of the largest providers of public financing for infrastructure worldwide – agreed to work towards strictly controlling public investment flowing into projects with high pollution and carbon emissions both domestically and internationally” (http://www.whitehouse.gov/the- press-office/2015/09/25/fact-sheet-united-states-and-china-issue-joint- presidential-statement)

A CPI Report 1 November 2015 Slowing the Growth of Coal Power Outside China

2. China grew into a significant provider of finance to overseas coal power generation In this report, we estimate how much “overseas” coal- amount of finance going to projects not confirmed to be power generation China has financed and has plans to Chinese-financed, but very likely to be or to have been finance (see Figure 1 and the methodology box for more financed by Chinese players (for example, projects that details). We find that USD 21-38 billion went to projects involve Chinese contractors and Chinese equipment financed over the last ten years (2005-2014) and that providers). up to another USD 35-72 billion is needed to finance projects still at the planning stage.2 These estimates To put these numbers in perspective, it is also important are significantly larger than previously estimated to keep in mind that China rarely finances 100% of total investment figures for China overseas investment.3 project costs. The total capital for the projects typically This difference reflects our systematic effort (1) to involves other sources of capital (including almost disentangle the actual provision of finance (equity, debt, always local players, at least on the equity side). In and loan guarantees) from other non financial proxies particular, for our sample of China-backed projects over for Chinese involvement in coal projects (engineering the last ten years, we find that China provided capital contracts value notably) and (2) to estimate the corresponding to around 30-60% of the total estimated projects’ cost of Figure 1 – Estimated finance for China-supported overseas coal power projects – past investment is over 2005-2014. USD 65 billion, for around 55 GW of coal power. Past Investment Planned Investment Total Project Value For projects yet in China-supported, overseas in China-supported, overseas coal power projects coal power projects to be closed, we find a higher TOTAL PROJECT VALUE: $92 BN portion of Chinese money, close to $20 bn 40-80% of the $37 bn total estimated TOTAL PROJECT VALUE: $65 BN projects’ cost of USD 92 billion, for 70 GW of $27 bn Key: coal power. The $17 bn HOST/ROW latter case reflects $35 bn INVESTMENT an increasing ESTIMATED involvement of $21 bn CHINESE INVESTMENT Chinese players CONFIRMED on the equity CHINESE INVESTMENT side as well as very large projects where Source: CPI analysis based on various sources (see methodology box for more details). ROW stands for rest of the world. debt is expected to financed 2 The estimate’s lower bound is restricted to confirmed finance only while exclusively by the upper bound also includes likely finance (based on the involvement of China. Note that there is a significant chance that some Chinese contractors, Chinese equipment providers, the pre-existence of projects still in the planning phase don’t proceed, for a framework agreement between China and the coal power project host various reasons, so these forward-looking estimates country or previous coal power finance deals involving Chinese money in may differ from actuals. the country). 3 A paper by the University of Tokyo estimates through a review of itemized When we put these estimates in perspective, we find loan agreements that Chinese public financing for international coal power that China has plans to provide 11-21% of total foreign projects from between 2007 and 2013 is over USD 13.1 billion – more than financing for new overseas coal power projects (Figure a third of all development finance institutions’ financial support for coal 2). Chinese investment represents around 4-7% of total globally. The number reaches USD 20.6 billion if accounting the projects domestic and foreign investment in past projects. These pledged in Memorandums of Understanding.

A CPI Report 2 November 2015 Slowing the Growth of Coal Power Outside China

Figure 2 – Estimated share of Chinese coal power capital in total overseas projects. Past investment represents projects that were not cancelled and includes financing from various sources including domestic sources.

Planned Investment, Past Investment: $525 bn* Planned Investment: $825 bn* international market only* 4-7% 11-21%

*includes domestic finance *excludes domestic finance and likely project cancellations Total Project Value *includes domestic finance and likely Key: project cancellations CONFIRMED CHINESE INVESTMENT ESTIMATED CHINESE INVESTMENT HOST/ROW INVESTMENT

Source: CPI analysis / CPI & PLATTS data current projects are mainly financed by local actors 2.1 Chinese funding of overseas coal (including equity investors and local banks such as in power focused on South and Southeast Turkey), Asian export credit agencies and investors from Japan, China, Korea, and India, and multilateral Asia development banks. Over the last ten years, we find that most of the Chinese overseas coal power capital went towards The USD 35-72 billion figure of planned future South Asia and Southeast Asia, with three countries – investment (prior to the commitment announcement India, Indonesia, and Vietnam – receiving around 60% of in September) represents an estimated 11-21% of total the total Chinese overseas coal power capital. China’s overseas finance, after adjusting for projects likely to be focus on Asian countries is in line with its overall direct cancelled irrespective of the recent commitments and investment trend in the region.5 excluding domestic investment.4 More recently, China started diversifying the It is important to note that other nations, international destination countries in its “portfolio”, with multi-billion investors and lenders also play an important role, with dollar projects being planned in Pakistan, India, and planned investment estimated at USD 272-307 billion. Russia, together representing more than 50% of the By comparison, local investment for coal power is total Chinese finance overseas coal finance that hasn’t estimated at USD 218 billion. yet reached financial closing. In the case of Pakistan, the main region of focus is the China-Pakistan Corridor. In India, China has been lending on commercial terms, which is still cheaper than local debt. In Russia, the project for which Chinese money is planned is a massive coal power project; the intent is to export the 4 We find that Chinese projects are less likely to be cancelled compared to electricity back to China. In the meantime, projects in other providers of coal power finance for three main reasons: (1) Chinese West Asia, Africa, and East Europe are also quickly players provided lower bids with tied financing making projects less picking up. We illustrate Chinese investments by likely to be cancelled for financing reasons, (2) Chinese projects are also about tied infrastructure deals and foreign affairs objectives hence fully backed by the Chinese government, and (3) Chinese lenders took over 5 WRI, China’s Overseas Investments Explained in 10 Graphics (2015): http:// the financing of multiple projects from DFIs when the latter committed to www.wri.org/blog/2015/01/china%E2%80%99s-overseas-investments- cuts. This is discussed in greater detail throughout this report. explained-10-graphics

A CPI Report 3 November 2015 Slowing the Growth of Coal Power Outside China

Box: Methodology To estimate how much Chinese coal power capital goes to power generation projects outside China, we undertook the following bottom-up modeling exercise. We believe this systematic approach allowed us to capture the most comprehensive picture of the extent and blend of Chinese overseas coal power capital (around 150 projects as of Summer 2015), including not just capital that is confirmed to be Chinese, but also capital that is most likely Chinese. Our approach: 1. Identified projects with Chinese involvement. To do so, we employed various data sources including the Platts World Electric Power Plants Database, the Coalswarm/SourceWatch wiki,a the Bankwatch database and reports,b the AidData database,c the industcards online database,d the Heritage Foundation database of Chinese foreign direct investments,e annual reports and press releases from Chinese coal power generation players (Engineering, Procurement, and Construction, i.e. EPCs, but also SOEs, lenders, equipment companies, etc.), government overseas agencies’ websites, news reports, stakeholder interviews, and academic research.f The review was done for each region of the world on a country-by-country basis looking in-depth at all the coal power generation projects since 2005. We have used our judgment in processing conflicting information from different sources, to exclude cancelled projects, and to avoid double counting. 2. Shortlisted and categorized projects. We included projects that have confirmed involvement of a Chinese investor, lender or guarantor, as well as projects for which we can reasonably assume Chinese money is involved (Chinese contractors, equipment manufacturers, etc.). Projects were also categorized according to various dimensions of interest (location, year of financial close, project capacity, project status, etc.). 3. Gathered useful data on project financing: We noted the identity of local and international partners, co-investors, lenders, guarantors but also amounts involved, and financing terms (concessional vs. market rate, debt maturity, fees, etc.). When data was missing, we estimated these based on our understanding of project financing in various countries as well as previous similar transactions. a International Chinese coal projects (http://www.sourcewatch.org/index.php/International_Chinese_coal_projects) but also individual country pages. b http://bankwatch.org c http://china.aiddata.org d http://www.industcards.com e Heritage Foundation, China global investment tracker (http://www.heritage.org/research/projects/china-global-investment-tracker-interactive-map) f Notably The University of Tokyo, Quantifying Chinese Public financing for Foreign Coal Power Plants, 2014 (http://www.pp.u-tokyo.ac.jp/research/dp/docu- ments/GraSPP-DP-E-14-003.pdf) destination countries in Figure 3. As will be discussed in to be Chinese. Figure 4 illustrates our findings for the more detail in the next section of this report, all these portion of coal power capital that is confirmed to be transactions are consistent with China’s domestic from China:6 USD 21 billion for projects financed over economic priorities and international ambitions. the last ten years and USD 35 billion for projects not yet financially closed. 2.2 Chinese overseas coal power capital is mainly debt to support construction Coal power generation projects are capital-intensive projects and the two single largest capital expenditures contracts & equipment exports are the construction contract and plant equipment. We next explore financing instruments for confirmed Given that these two elements are key variables in finance, since information is not available for unconfirmed finance. Out of USD 157 billion of finance 6 For China estimated financing (including finance that is likely to be for 125 GW of already built as well as planned China- Chinese, in addition to finance confirmed as Chinese), it would be fair to backed coal power, USD 56 billion is confirmed to be assume that Chinese coal power finance would be in the form of debt in Chinese capital and an additional USD 54 billion is likely similar portions to that for confirmed financings (either from policy or commercial banks supported by Sinosure).

A CPI Report 4 November 2015 Slowing the Growth of Coal Power Outside China

Figure 3 – Top destinations for Chinese overseas coal power finance.

PLANNED CHINESE INVESTMENT China Money Only $72 bn total

$14 bn Pakistan China-Pakistan Corridor projects Commercial terms still cheaper than local debt $13 bn India Significant lending to Reliance Power notably Support to a 8GW cross-border China $11 bn Russia PAST CHINESE INVESTMENT coal power export project $38 bn total $5 bn Bangladesh India $10 bn $5 bn Vietnam Indonesia $8 bn Vietnam $5 bn $24 bn ROW More diversified pool of individual countries Turkey $3 bn from Africa and Eastern Europe ROW $11 bn

Source: CPI analysis based on previously mentioned sources.

international competitive biddings for power plant EPC contract engagements through subsidiaries, projects, China’s support of equipment exports and after a few years of gaining experience and and extension of credit to Chinese participants in confidence in operating in the host country, they begin engineering, procurement, and construction (EPC) to carry out larger scale equity investment projects contracts is unsurprising. (often forming joint ventures with local partners to invest in the projects). This can be seen from Big 5 For projects financed over the last ten years, we find companies’ involvement in Indonesia. The second that equity investments account for a very small portion group would be made of project contractors (such of total Chinese coal power capital. The vast majority as Power Construction Corporation of China). These of finance is debt associated with equipment exports undertake Build-Operate-Transfer projects and are and EPC contracts, provided by policy banks like China responsible for obtaining concessional financing for Development Bank and China Eximbank as well as the design, construction, operation, and maintenance Chinese commercial banks typically supported by of the projects. At the end of the concession period, China’s export credit insurer, Sinosure. The size of the the entire project is transferred to the government, export-driven lending is likely driven by Chinese goals enabling Chinese contractors to be compensated for to promote export and overseas construction activities. their investment and operation costs. In some cases, For projects yet to be closed, however, the blend of Chinese companies keep a residual equity as part of equity has increased significantly to more than 20% joint venture agreements. of total Chinese financing. Again, these are forward- looking estimates that may differ significantly from 2.2.2 WHO PROVIDES THE DEBT AND ON WHAT TERMS? actuals. To help coal power equipment manufacturers 2.2.1 WHO PROVIDES THE EQUITY CAPITAL? export their products including boilers, turbines, and generators, “policy banks” (China Eximbank and China Major players in overseas coal power equity investment Development Bank) and commercial banks extend loans include domestic power generators (the Big 5 domestic in the form of export buyers’ credits to foreign project power generators such as Huadian Group but also developers to support their purchase of the equipment. grid companies such as China Southern Power Grid) Export buyers’ credits ensure timely payment to and project contractors such as Power Construction manufacturers and greatly reduce the risks for major Corporation of China. Equity investors can be exporters including , , categorized in two distinct groups. The first group is and . This has become all the more domestic power generators. The generators often start important as equipment manufacturers have expanded out exploring overseas markets through smaller-scale

A CPI Report 5 November 2015 Slowing the Growth of Coal Power Outside China

Figure 4 – Providers of Chinese coal power finance – confirmed financing only.

China Confirmed Only $35 bn total Unspecified equity $2 bn EPC / Equipment: equity $5 bn Power Generation / SOEs: equity Unidentified banks Unspecified debt $21 bn total

$20 bn Commercial banks: $6 bn Typically supported by Sinosure. Main players are ICBC & Bank of China. $6 bn China Development Bank: $4 bn $9 bn Higher rates than ExIm but still very competitive $4 bn China Eximbank: Typical mix of concessional (~2%) and PAST PLANNED commercial interest rates (~6%) CHINESE CHINESE INVESTMENT INVESTMENT

Source: CPI analysis. overseas significantly during the past few years.7 For Promoting the export of domestic product and construction contracts, the biggest participants in EPC construction capacity is a typical objective of export contracts are state-owned companies. Chinese EPC credit agencies around the world. In China, financial contractors usually enter into the contracts by winning institutions such as China Eximbank and China the bids for construction, or come into the contracts as Development Bank are the main export facilitation the designated counterparties under larger investment and promotion agencies that support China’s coal framework agreements struck between Chinese and power projects overseas. Both banks are among the foreign governments. The open bidding often takes three policy banks established in 1994 to facilitate the longer for the projects to move forward, while contracts government’s economic and trade initiatives, focusing under government-to-government agreements are on export expansion and infrastructure projects; they generally seen as a faster way to develop projects, with have been supported by the government through capital the advantages of government guarantees and other injections, central bank funding, subsidies, and tax facilitations in favor of the projects.8 benefits.9 In 2013, China Eximbank financed the export of mechanical and electronic equipment, high-tech 7 Dongfang Electric, a leading Chinese power generator manufacturer and products, overseas project contracts and investments project contractor, has seen its overseas revenue grow from 1% of total for a cumulative total of USD 256 billion.10 In the revenues in 2009 to over 20% in both 2012 and 2013. Other major power same year, China Development Bank had outstanding equipment manufacturers have also seen rapid growth trends in the share foreign currency loans of USD 251 billion.11 These banks’ of their foreign market segments. financing of coal power is a very small amount relative 8 The following State-owned EPC contractors and subsidiaries were active in the overseas coal power market: (1) China Energy Engineering Although the largest players in the international coal power construction Group Corporation (CEEC) and its subsidiary, China Power Engineering are state-owned entities, it is worth noting that privately held EPC Consulting Group Corporation (CPECC), (2) Power Construction contractors such as Wuhan Kaidi Electric Power and Sichuan Hongda Corporation of China (POWERCHINA) and its subsidiaries, Shandong Company, are a small but active group in this market. Electric Power Construction Engineering Corporations (SEPCO I, II, III), 9 Fitch Affirms China’s 3 Policy Banks, Reuters (2013): http://www. and (3) China National Machinery Industry Corporation (SINOMACH) and reuters.com/article/2013/04/09/fitch-affirms-chinas-3-policy-banks- its subsidiaries, China Machinery Engineering Corporation (CMEC), China idUSFit65423820130409 National Electric Engineering Corporation (CNEEC), and China National 10 China Eximbank Annual Report (2013): http://www.eximbank.gov.cn/tm/ Heavy Machinery Engineering Corporation (CHMC). Other state-owned report/index_27_26379.html power generation companies with major EPC businesses are also active 11 China Development Bank Annual Report (2013): http://www.cdb.com.cn/ participants in this market, such as China and . web/Column.asp?ColumnId=284

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to overall. For a foreign project to qualify for Chinese consortiums to engage in the lending process. bank loans, it must have a certain level of Chinese stakeholder involvement -- either 50% of an export As coal power projects often represent hundreds of product’s content, or 15% of the content in foreign millions of U.S. dollars in total value and can present construction contracts, must be Chinese. The sizes of significant credit risk to lenders. In order for foreign these contracts are usually more than USD 2 million.12 coal power projects to secure Chinese concessional The buyer’s down payment should be 15% of the total lending, it is usually a prerequisite for governments contract value; Chinese policy banks can provide of the host countries to either provide sovereign lending for up to 85% of the value of the contract to coal guarantees for these projects, or to designate supply power project developers. If the lending is provided to of natural resources as the form of repayment (or as sovereign entities, the preferential buyer’s credit and collateral) in contracts with Chinese natural resource government concessional loan interest rates are as low purchase companies. However, when there is no as 2-3%, and lending terms can be as long as 20 years.13 sovereign guarantee or designation of natural resource Regular export buyers’ credits require higher rates, but as payback, China’s export credit insurer (China Export are still cheaper than commercial loans. and Credit Insurance Corporation, also known as Sinosure), can play an important role in reducing the Other Chinese state-owned commercial banks have non-payment risks posed to export credit agency loans. also financed foreign coal power projects, especially Established in 2001 when China joined the World Trade through syndicated loans, where a consortium of banks Organization, Sinosure has been a critical vehicle in can each take up a share of the total lending amount encouraging large electro-machinery equipment export of a large project while reducing their individual risk in and overseas engineering contracts.14 In 2011, Sinosure case of default. A lot of these coal power syndicated provided medium to long-term buyers’ credit insurance loan projects take place in South Asia and South East for a total insured amount of USD 11 billion just for this Asia, whereas policy banks such as China Development year.15 In the project database, we have identified cases Bank, along with state-owned commercial banks such where Sinosure guarantees up to 85% of the amount as Bank of China and Industrial and Commercial Bank of of the EPC contract. In such cases, they clearly play an China, and sometimes foreign commercial banks such important role in the viability of the project. as Standard Chartered Bank and Barclays Capital, form

12 Steps on Applying Project Financing from China, Yang Chunlin (2009): https://books.google.com/books?id=z0m_ Os7NQ8oC&printsec=frontcover#v=onepage&q&f=false Understanding ECAs – Chinese Export Credit Agencies, CC Solutions Blog (2012): http://ccsolutionsblog.blogspot.com/2012/04/understanding- ecas-chinese-export.html 14 Sinosure website, accessed May 8, 2015: http://www.sinosure.com.cn/ 13 China Eximbank, Overview of two types of preferential loans (2013): http:// sinosure/english/Company%20Profile.html www.chinca.org/cms/html/files/2013-12/16/20131216102948872930302. 15 Sinosure annual report 2012: http://www.sinosure.com.cn/sinosure/gywm/ pdf xbkw/gsnb/images/20120618/27216.pdf

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3. National interests are driving Chinese finance in overseas coal power projects We next delve into China’s rationale for financing • In a very limited number of projects, finance overseas coal power projects. The main reason for supports exports, such as the export-to-China China’s provision of public finance and guarantees projects mentioned above as well as to the for export and construction contracts is that overseas Balkans, in a couple of projects (up to 17% of market expansion helps the Chinese government total estimated transaction value). foster domestic economic growth, as well as strengthen strategic international political ties. Figure We explore these issues in more detail in this section. 5 summarizes our findings on the key drivers for Chinese coal power financing (past and planned) from 3.1 Going global addresses the coal power the perspective of Chinese players as well from that industry’s domestic overcapacity and of the countries hosting the coal power projects.16 We shifting priorities identify four main trends, based on project data that we Domestically, the growth in demand for coal power collected: is declining amid a variety of economic and political • Chinese involvement is intended to support its changes, including escalating environmental concerns, domestic players (up to 95% of total estimated and slowing industrial demand. In regions like Northeast transaction value) or to engage in profitable China, these changes have created coal power project ventures;17 overcapacity, contributing to a low utilization rate for coal power and high curtailment of renewable energy.19 • Finance also helps achieve foreign policy EPC companies, primarily those in the thermal power objectives (up to 38% of total estimated sector, as well as equipment manufacturers specializing transaction value), secure a broader and more in boiler, generator, and turbine production, are eager profitable infrastructure such as ports, mines, to explore alternative outlets for their products and and railroads, import coal (up to 33% of total services in the international market. Since EPC and estimated transaction value), and import equipment manufacturing companies are mostly larger electricity back to China (10% of total estimated state-owned enterprises, overcapacity also concerns transaction value); the government. In response, the government is • For host countries, the main driver for seeking supporting their overseas expansion.20 Chinese (or other international) finance is to meet local electricity demand, although local Developing overseas power projects, including coal- players also typically mention other motives fired power, is part of the State Council’s plan to such as infrastructure-led development (up absorb excess domestic production capacity and to 87% of total estimated transaction value), undertake major retrofits. In the May 2015 guidance, reduced dependency on fuel imports (up to 61% the State Council urged companies to utilize China’s of total estimated transaction value – although historical advantage in project contracts and finance in several cases, the addition of a coal-fired support provided by financial institutions, and to power plant is creating this very exposure explore alternative collaboration models with foreign to coal imports), and reduction of domestic countries, including the provision of export credit or electricity costs (up to 80% of total estimated other favorable financing terms for EPC or equipment transaction value); 18 19 Spilled Wind: An Update on China’s Wind Integration Challenges, 16 Note that each project can have multiple drivers. Dark brown coloring Michael Davidson (2014): http://theenergycollective.com/michael- refers to a clear driver while the light orange coloring suggests a davidson/346951/spilled-wind-update-china-s-wind-integration- potential driver that cannot be easily confirmed (mainly due to the lack of challenges transparency on project economics and financials). 20 Recently, in January 2015, State Council Premier Li Keqiang visited a 17 Ibid. It is very difficult to assess project profitability in the absence of subsidiary of the China Energy Engineering Group, an electric power transparent information on project economics. CPI identified these design institute. He learned about the company’s coal-fired EPC project projects based on CAPEX for the technology deployed and power in Vietnam, encouraged the equipment manufacturing industry to go generation prices in various countries. As noted elsewhere, some global, and indicated accompanying fiscal policy support from the unprofitable projects that support other Chinese goals go forward. government. Yicai, Li Keqiang visits Guangdong Province to promote 18 Again, profitability claims are typically hard to verify in the absence of “Going Global“ for Chinese equipment industry (2015): http://www.yicai. transparent information. com/news/2015/01/4060518.html

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Figure 5 – Drivers of China coal power financing as a % of total project value for both past & planned projects.

DRIVERS OF CHINESE SUPPORT: DRIVERS OF HOST COUNTRY DEMAND: Support of Chinese elec. industry Ability to meet local demand Key: Very

Likely Project profitability Infrastructure-led development

Foreign aairs objectives Reduced dependence on fuel imports

Tied infrastructure/commodities deals Reduced electricity cost

Electricity exports to China Elec. exports to neighbors Total Project Value

20% 40% 60% 80% 20% 40% 60% 80%

Source: CPI analysis. purchases, the Build-Operate-Transfer model, and foreign coal-fired power projects can provide electricity public-private partnerships. generation companies with profits, especially if the companies receive government fiscal support.21 Additionally, there is significant demand for Chinese equipment and construction in developing countries. 3.2 Overseas presence facilitates the Many developing countries have limited technology import of natural resources and helps and capacity for supplying equipment and are highly reliant on the import of foreign equipment, providing unlock infrastructure contracts a huge market for Chinese equipment manufacturers Focusing on overseas infrastructure projects not only and project contractors who have both cost advantages offers market opportunities for Chinese contractors, and decades of expertise in sectors such as coal-fired manufacturers, and investors, but also unlocks broader power. infrastructure projects and helps channel natural resources back to China. In some cases, China has Besides the incentives provided to contractors and provided finance to foreign coal power plants which manufacturers, our interviews with stakeholders supply electricity to the local mining and industrial suggest that overseas markets provide equity sectors, and also built export infrastructure such as investors (such as Big 5 generators and state-owned port facilities in these countries, in order to export equity funds) with an additional source of revenue. In natural resources to China later. In other cases, China addition to helping state-owned enterprises meet the has been importing other commodities (such as copper government’s Going Global Strategy requirement to from Myanmar, where there is a Chinese coal power generate a certain percentage of income from overseas, project).22

21 CPI interviews 22 SourceWatch, Kalewa http://www.sourcewatch.org/index. php/Kalewa_power_station

A CPI Report 9 November 2015 Slowing the Growth of Coal Power Outside China

3.3 Overseas presence strengthens generated back to China (as discussed in the analysis of strategic political ties investment destination). Another benefit for China to participate in foreign Financial support from the government mainly consists infrastructure projects is to forge new political ties or of debt finance from state-owned banks (policy banks strengthen existing ones with the developing world. and commercial banks often supported by Sinosure). Power infrastructure projects are often part of larger In addition to this, major investment vehicles include “development package deals” between China and the newly formed Silk Road Fund, the China-Africa foreign countries. For example, China launched an Development Fund,26 the China-ASEAN Investment economic corridor plan to invest about USD 46 billion Cooperation Fund,27 and a subsidiary of China in railways, roads, energy, and other infrastructure Investment Corporation dedicated to overseas direct projects in Pakistan.23 This economic corridor plan investment.28 These USD-dominated offshore equity is expected to strengthen the economic relationship facilities also take advantage of the significant amount between and the national security of the two countries of foreign currency reserves of China. The country as well as promote China’s “One Belt, One Road” currently holds nearly USD 4 trillion worth of foreign which encourages cooperation and joint economic exchange reserves, two-thirds of are in U.S. dollars.29 development among Eurasian countries.24 Engaging Investing these foreign currency reserves in overseas in foreign infrastructure projects has also increased infrastructure projects, including power projects, China’s bargaining power both economically and provides an attractive alternative to holding low-yield politically, which China can leverage to strengthen its U.S. treasury bonds. position in the region.25 In summary, China’s engagement in the overseas coal 3.4 Additional reasons for Chinese money power sector has helped Chinese companies alleviate domestic industrial overcapacity, find markets and flowing into overseas projects opportunities for Chinese products, services, and In addition to the major drivers for overseas investment investments, and generate additional profits. For highlighted above, we identified some additional the government, promoting overseas coal power reasons for China’s financial support to overseas coal development also helps it to strengthen strategic power generation projects. Two of the most interesting political ties and increase its sphere of influence. ones are (1) getting a higher return on foreign currency Because of these benefits, China has continued to reserves and (2) investing in cross-border power support overseas coal power through debt finance and, generation with the intent of importing the power increasingly, through equity investments.

23 Reuters, China and Pakistan launch economic corridor plan worth $46 billion (2015): http://www.reuters.com/article/2015/04/20/us-pakistan- china-idUSKBN0NA12T20150420 24 Lin Min Wang, China Foreign Affairs, University, China-Pakistan Economic Corridor will reinforce China-India Cooperation (2015): http://finance. qq.com/original/caijingguancha/f1462.html 26 Affiliated with China Development Bank. 25 Gavin Bowring, Financial Times Asean Confidential, Vietnam yields 27 Affiliated with China Eximbank. cautionary tale over Chinese investment, (2014): http://blogs.ft.com/ 28 State Council, Guidance opinion regarding the promotion of international beyond-brics/2014/11/27/vietnam-yields-cautionary-tale-over-chinese- production capacity and equipment manufacturing collaboration, 2015: investment/ http://wzs.ndrc.gov.cn/zcfg/201505/t20150521_692778.html Keira Lu Huang, South China Morning Post, State firms barred from 29 Financial Times, China’s foreign exchange reserves near record $4tn, Vietnam contract bids (2014): http://www.scmp.com/news/china/ 2014 http://www.ft.com/intl/cms/s/0/4768bd3c-c461-11e3-8dd4- article/1528221/state-firms-barred-vietnam-contract-bids 00144feabdc0.html#axzz3atguKxxY

A CPI Report 10 November 2015 Slowing the Growth of Coal Power Outside China

4. China export support and absolute domestic cost advantage creates concerns regarding overseas coal power development In this section, we investigate the international equipment export, project contracting, and investment community’s concerns about China’s ability and projects. One potential benefit stated in the guidance is ambition to finance coal power projects beyond its to promote the Chinese yuan as an international reserve borders. The crux of the issue has to do with China’s currency to be used to settle payments in cross-border coal power generation cost advantage over international transactions. competitors (both technology and financing costs).30 It is worth noting that China’s support for exports is 4.1 The Chinese government provides technology blind. First of all, while China’s financing in financial support to companies going overseas infrastructure projects is on the rise, there is no clear differentiation between financing for power global versus non-power projects, or for coal power versus To facilitate the opening of new markets for Chinese non-coal power projects. The power sector is one of a contractors and manufacturers, the government has dozen of equipment and construction service sectors called for enhanced financial and fiscal support to help that the State Council guidance is pushing forward, these companies go global. In the May 2015 policy and in the power sector specifically, China has been guidance from the State Council,31 the government facilitating a variety of electric power projects in foreign outlined concessional loans, syndicated loans, export countries. For example, China has developed more buyers’ credit, access to project finance, commercial than 300 hydropower projects overseas, two-thirds loans, equity investments, and export credit insurance of which are in Southeast Asia and Africa.32 China has as examples support it plans to provide to overseas also invested USD 40 billion in wind and solar projects

Box: The central role of the Chinese Ministry of Commerce (MOFCOM) Since overseas lending and investments are tied to national interests, the decision to provide financial assistance is not merely a decision at the level of the policy banks or equity funds. A variety of government agencies oversee this financing, including the Ministry of Commerce (MOFCOM), which provides the most direct oversight. MOFCOM facilitates the Going Global Strategy by coordinating commercial activities within host countries, including negotiating government-to-government agreements,a approving outward investment projects over a certain size,b and coordinating with the China Eximbank on concessional loans through regional departments and departments in charge of outward investments.c There are cases where, under a government-to-government framework agreement, MOFCOM is actively leading and pushing for the policy banks to provide loans to overseas coal power projects.d As a result, Chinese policy banks exhibit higher risk tolerance than other international lenders about certain commercial aspects of the projects.e

a WRI, Emerging Actors in Development Finance: A closer look at China’s overseas investment, 2012 http://www.wri.org/resources/presentations/emerging-ac- tors-development-finance-closer-look-chinas-overseas-investment b Norton Rose Fulbright, Rules on overseas investments by Chinese companies, 2009 http://www.nortonrosefulbright.com/knowledge/publications/21814/chi- na-insight-issue-17 c Rand Corporation, Chinese Engagement in Africa. Drivers, Reactions, and Implications for U.S. Policy, 2013 http://www.rand.org/content/dam/rand/pubs/re- search_reports/RR500/RR521/RAND_RR521.pdf d CPI interview e Chadbourne Project Finance Newswire, Negotiating with Chinese lenders – Chinese lenders emerging as a major source of funding in international project finance transactions, 2011 http://www.chadbourne.com/NegotiatingWithChineseLenders_Nov11_Projectfinance/

30 Support for domestic power generation helped create this cost advantage – this is discussed at length in an upcoming CPI paper. 32 Frauke Urban and Johan Nordensvard, China Dams the World: The 31 State Council’s Guidance regarding the promotion of international Environmental and Social Impacts of Chinese Dams. 2014: http://www.e-ir. production capacity and equipment manufacturing collaboration, 2015: info/2014/01/30/china-dams-the-world-the-environmental-and-social- http://wzs.ndrc.gov.cn/zcfg/201505/t20150521_692778.html impacts-of-chinese-dams/

A CPI Report 11 November 2015 Slowing the Growth of Coal Power Outside China

worldwide, primarily in developed countries.33 As a would be awarded another contract, to help the country result, China support doesn’t appear to favor coal power meet urgent electricity construction goals.35 Moreover, deployment (within power generation, hydro, renewable Chinese lenders also maintained the ability to lend in energy, and gas-fired generation seem to be equally very large amounts after the financial crisis in 2008.36 supported). We estimate that export credit providers’ exposure to coal power is limited, representing at most, In addition, Chinese lenders often perceive risks, 12% of their overseas loan balance (in the case of China including project and country risks, differently than Eximbank). other international financiers, and subsequently Chinese banks are willing to lend more money to a 4.2 China is a growing funder of overseas greater number of countries.37 For example, in the coal power development because Eastern European market, there are instances where Japanese competitors have withdrawn from coal power Chinese Engineering, Procurement, tenders due to local political situations which altered and Construction (EPC) companies project feasibility, but Chinese EPCs remained, with can bid lower than the competition on policy direction of the Chinese Ministry of Commerce project contracts (MOFCOM) and financial support from Chinese policy banks. Chinese state-owned policy banks and export Chinese companies have been able to obtain a larger guarantors are willing to give up certain economic market share of overseas coal power development benefits in order to gain a strategic foothold in emerging primarily because of their capacity to bid lower prices markets. for projects.34 Compared to Engineering, Procurement, and Construction (EPC) contractors from other While Chinese banks offer Chinese companies relatively countries, Chinese companies often have lower easy access to low-cost finance, they do not seem to be construction, operation and financing costs, which offering more favorable rates than other international enable them to outbid competitors. lenders including multilateral development banks and export credit agencies. From the limited sources of These low costs are due to several advantages that information we have access to, Chinese concessional Chinese EPC companies enjoy, including access to lending and syndicate loan rates and durations provided cheap equipment and services from Chinese suppliers to overseas coal power projects are comparable to and subcontractors, and inexpensive Chinese labor. In the level other international lenders, such as German addition, the Chinese Yuan to US Dollar exchange rate development bank (KfW), Japan Bank for International in recent years has lowered their overseas project costs. Cooperation (JBIC), Japan International Cooperation Another advantage Chinese EPC contractors often Agency (JICA), and Asian Development Bank (ADB), enjoy is access to low-rate loans from the Chinese have offered. In regions including Asia, Africa, and East policy banks to finance projects. Chinese EPC Europe, long term concessional loans rates from China contractors’ ability to arrange their own low-cost policy banks are concentrated around 2%-3%. That financing from China without the additional time and said, Chinese lending terms can be more flexible than cost needed to arrange syndicate loans from other those provided by other countries which abide by OECD countries or other non-Chinese organizations makes guidelines. Due diligence carried out by Chinese banks them more attractive to host countries (making China can take longer to process than other lenders’, partially due to Chinese lenders’ lack of experience in financing a one-stop shop for host country project planners). For 38 example, Vietnam adopted a policy in 2005 stating that projects in overseas markets. EPC contractors who arranged finance for their projects 35 Vietnam Chamber of Commerce and Industry - Vietnam Business Forum, Diversifying Machinery Supply Sources, 2014, http://vccinews.com/ news_detail.asp?news_id=30784 36 Chadbourne Project Finance Newswire, Negotiating with Chinese lenders – Chinese lenders emerging as a major source of funding in international project finance transactions, 2011: http://www.chadbourne.com/ 33 WRI, China’s overseas investment in the wind and solar industries: trends NegotiatingWithChineseLenders_Nov11_Projectfinance/ and drivers, 2013: http://www.wri.org/sites/default/files/pdf/chinas_ 37 ibid. overseas_investments_in_wind_and_solar_trends_and_drivers.pdf 38 Chadbourne Project Finance Newswire, Negotiating with Chinese lenders 34 Vietnam Chamber of Commerce and Industry - Vietnam Business Forum, – Chinese lenders emerging as a major source of funding in international Chinese firms win 90% of Vietnam EPC Contracts, 2010, http://www. project finance transactions, 2011, http://www.chadbourne.com/ vccinews.com/news_detail.asp?news_id=21177 NegotiatingWithChineseLenders_Nov11_Projectfinance/

A CPI Report 12 November 2015 Slowing the Growth of Coal Power Outside China

4.3 China is supporting domestic In a similar fashion, Chinese equity investors in Engineering, Procurement, and overseas EPC projects benefit from favorable tax treatment. In 2004, the National Development and Construction (EPC) companies with a Reform Commission and the export-import Bank of wide range of tax reduction programs China, China EximBank, announced a policy to support In addition to the advantage of low-rate loans, Chinese Chinese stakeholders’ equity investment in overseas EPC contractors are able to reduce total project costs projects, including in projects that promote export of 41 and bidding prices through tax benefits. For example, equipment and technology. There are additional tax since 2013, the design portion of the projects under EPC benefits for overseas equity investments as well - for 42 contracts have enjoyed zero value-added tax, the supply example income tax deductions and tariff benefits. of equipment and raw material has received an export In summary, government support through favorable tax rebate, and construction under an EPC contract is 39 lending and tax benefits have lowered the effective exempt from business tax. Moreover, as of 2013, China costs of financing for EPC companies and other Chinese had signed agreements with 99 countries and regions investors in overseas coal power. This, combined with to avoid double taxation. These agreements have also lower construction and operation costs, has led to China included tax treaty benefits. For example, EPC projects becoming a significant provider of finance for overseas are exempt from income tax for certain periods of time, coal power generation. and projects’ staff is exempt from personal income tax while working abroad. 40

39 Finance and Accounting Journal, Discussion on the tax management of EPC contracts for companies implementing “going global” policy, 2014 41 NDRC, Announcement on providing credit support to key overseas http://www.sinosure.com.cn/sinosure/xwzx/rdzt/tzyhz/gjtzyj/164836.html investment projects, 2004: http://wzs.ndrc.gov.cn/zcfg/200804/ 40 Finance and Accounting Journal, Discussion on the tax management of t20080411_670936.html EPC contracts for companies implementing “going global” policy, 2014: 42 State Council Overseas Affairs Office website, Overview of “going global” http://www.sinosure.com.cn/sinosure/xwzx/rdzt/tzyhz/gjtzyj/164836.html strategy, 2011: http://qwgzyj.gqb.gov.cn/yjytt/159/1743.shtml

A CPI Report 13 November 2015 Slowing the Growth of Coal Power Outside China

5. Interpreting China’s commitment to control investment flowing to overseas projects As discussed, China has been slowly replacing other this section. funders in financing overseas coal power projects. Many international funders, such as the World Bank 5.1 Uncertainty on the scope of the and the United States (via the US ExIM Bank notably),43 commitment have pledged to no longer support coal-fired plants The first issue has to do with the definition of public due to climate change and other environmental and finance. Is “public finance” to be interpreted as China’s health concerns. Concerns about China increasing its policy banks concessional support only? Does it include share of coal power finance provision overseas are China’s policy banks plus the share of commercial more pronounced as Chinese financial institutions banks’ financing supported by the China Export and environmental guidelines are not as restrictive as those Credit Insurance Corporation, Sinosure? Do all lending of the historical lenders. activities from state-owned banks fall within the China has not only been stepping in to replace the definition? And what about equity investments from market share of entities and countries who pledged SOEs? Depending on the definition applied, anything to restrict support to coal power, but also the share between one quarter and all of the expected investment of funder countries who have not pledged to do so. volumes could be affected by the commitment. For example, in Vietnam, China outbid Japan and Definitions matter a lot, and international observers Korea to become the general contractor of 60% of have expressed concerns that finance for high-carbon Vietnamese thermal-electric projects from 2003 to and polluting power projects may leak from historical 2011 (74% if including subcontracts).44 Similarly, in sources of Chinese public finance to new investment Indonesia, Chinese contractors and investors have vehicles and institutions set up by China or jointly with undertaken a dozen power generation projects in the other countries (e.g. Asian Infrastructure Investment Indonesian market since 2006 as part of the Indonesian Bank). government’s first 10 GW Fast Track Program. In doing The Chinese government has also not yet clarified so, they have taken a significant portion of the market which projects will no longer receive public support. which had previously been financed and guaranteed Arguably “projects with high pollution and carbon largely by international export credit agencies such as emissions” should include coal power generation but the Japan Bank for International Cooperation (JBIC) and the government has not confirmed this in any public Korea Eximbank.45 statement so far and it may be that highly unprofitable That being said, China, in September 2015, indicated upstream oil and gas or coal mining projects are the its commitment to restrict public finance to high- real targets of this announcement. More likely, is that carbon projects. The question now becomes how to Chinese institutions will make a similar commitment interpret China’s commitment to “controlling public to many other international development finance investment flowing into projects”. This depends on institutions that only coal power generation projects several parameters that may be clarified in the next meeting specific criteria will be eligible to funding.47 months.46 We discuss some of these in greater detail in They may also make exceptions for some projects depending on who is receiving public money (like the 43 Reuters, World Bank to limit financing of coal-fired plants, 2013: http:// US commitment48). As a result, we cannot take for www.reuters.com/article/2013/07/16/us-worldbank-climate-coal- granted that all of the planned projects with Chinese idUSBRE96F19U20130716 involvement will be affected or cancelled. The Washington Post, The U.S. will stop financing coal plants abroad, 2013: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/27/the-u- s-will-stop-subsidizing-coal-plants-overseas-is-the-world-bank-next/ 44 Vietnam Chamber of Commerce and Industry - Vietnam Business Forum, Diversifying Machinery Supply Sources, 2014, http://vccinews.com/ news_detail.asp?news_id=30784 45 Norton Rose, Indonesia power projects – Ten things to know, 2013: http:// 47 Thermal efficiency thresholds like , emissions performance www.nortonrosefulbright.com/files/ten-things-to-know-indonesia-power- standards like the European Investment Bank, or even requiring CCS to be projects-74165.pdf eligible for funding. 46 Either announcements made during the climate negotiations or in the 48 http://www.treasury.gov/resource-center/international/development- wake thereof. banks/Documents/CoalGuidance_2013.pdf

A CPI Report 14 November 2015 Slowing the Growth of Coal Power Outside China

5.2 The level of effort: ambitious or 5.3 The risk of other investors & lenders negligible cuts? taking over China’s market share The most important measure for assessing this If the overseas coal power financing market could commitment is how much it will reduce Chinese public realistically lose up to USD 17.6 bn in Chinese public finance towards new overseas coal power projects. We finance, there is a good chance that other investors now know that Chinese investment for such projects and lenders might be interested in moving in to provide totaled USD 38 billion over the last ten years and we that finance. Who would they be? Figure 6 summarizes identified a pipeline of projects that could be financed a project-by-project analysis of our project sample with up to USD 72 bn. of Chinese money. Table 1 looking into whether various groups of actors would below illustrates how much investment by the Chinese be definitely (brown bars) or potentially under certain could be cancelled under specific scenarios reflecting circumstances (orange bars) interested in replacing various definitions for public finance and various levels Chinese sources of finance: of effort. It also reflects the fact that many planned • We find that local lenders or central and local projects will not go ahead for a variety of reasons: faulty governments from other countries could cover economics to begin with, strong local opposition, other 31-65% of the shortfall in financing caused by bidders winning contracts, changing priorities for host Chinese public institutions withdrawing from countries’ policymakers, etc. the market. However these governments may We estimate that up to USD 30.2 bn. of Chinese lack the knowhow that energy project finance coal power finance could be cancelled because of lenders have and may have limited access to its recent commitment. A more reasonable range capital at an acceptable price. would be between USD 0.0 bn. (any level of effort • International lenders (BNP Paribas project below a reasonable estimate for projects that would finance unit for instance) and investors (private be cancelled for other reasons regardless of whether equity houses, independent power producers, the commitment was made) and USD 17.6 bn. (very etc.) could cover 42-77% of the shortfall in significant cuts in Chinese public lending). The question finance but would definitely not lend to some is, then, how will these cuts in public finance prevent countries because of country, currency, or the construction of coal power plants beyond those that political risks. In addition, in some countries the would have been cancelled anyway, irrespective of the cost of capital would not be competitive enough new Chinese commitment. for projects to be built (or conversely would require too high a rate of return). • Other development finance institutions could be interested (18-74%) but it ultimately depends

Table 1 – Potential amount of cancelled Chinese investment flows under various configurations (public finance definition and levels of efforts). EXIMBANK, CDB, AND THE SHARE ALL CHINESE EXIMBANK & OF SINOSURE- FINANCE (INCL. CDB FINANCIAL SUPPORTED SOE EQUITY Scenario 1: Limited cuts (20%) SUPPORT ONLY CCOMMERCIAL INVESTMENT) Scenario 2: Significant cuts (50%) LENDING Scenario 3: Cuts except for most advanced SCENARIO 1 - technologies and/or specific countries (80%) $0.0 BN $0.0 BN $0.0 BN ADDITIONAL CUTS Other assumptions: SCENARIO 2 - $3.2 BN $7.1 BN $12.2 BN • 1/3 of the projects in the pipeline won’t go ahead ADDITIONAL CUTS irrespective of the commitment SCENARIO 3 - $7.8 BN $17.6 BN $30.2 BN • Sinosure provides a guarantee for 50% of the total ADDITIONAL CUTS value of loans originating from commercial banks REFERENCE BASE $18.6 BN $41.8 BN $72.0 BN CASE Source: CPI analysis.

A CPI Report 15 November 2015 Slowing the Growth of Coal Power Outside China

Figure 6 – Systematic assessment of various players’ ability to replace Chinese sources of finance.

If Chinese players decide to ban coal financing, what share of finance would Total Project Value these other lenders and investors be VERY or LIKELY able to replace?

Local players - Capital constraints (availability & cost) - Related know-how

International lenders and investors - Country risk - Lending cost prohibitive

Other development finance institutions - Ban on coal lending except for some players (AfDB) and under certain circumstances

Other export credit agencies - Very competitive market - Projects go ahead at slightly more expensive terms <10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-80% 80-90% >90%

Note: Dark brown coloring refers to a clear ability to replace financing by this group of actors while the light orange coloring suggests a tentative ability to replace financing. Source: CPI analysis. on the potential geographical coverage of the guidelines to the various public finance entities (China various institutions (i.e. countries of operations) Eximbank, China Development Bank, etc.)? Or can a and the nature of the self-restrictions imposed single entity such as MOFCOM be used as the “flood on coal power lending. gate” to prevent the flow of this funding? How will they deal with the risks that finance providers will • Other export credit agencies could move workaround these recommendations49? In the absence most aggressively into the space vacated by of clarification about the envisaged arrangements for the partial retreat from China (84-86%). This “strictly controlling” investment flows, it will be hard reflects again the very competitive nature of to evaluate how effective this commitment could be. this market. Some projects might be able to Given that this announcement was made as part of the go ahead at a higher capital cost than those international climate negotiations, accountability and provided by Chinese lending while other transparency in implementation will be instrumental. projects might no longer be competitive. Likewise, whatever China ends up committing to, 5.4 China’s implementation plan matters the same will be expected from other major lenders (country-level development and export credit agencies, Whatever China’s level of commitment, how it as well as development banks).50 implements this change of strategy will be key. Will the Chinese government issue general investment 49 Linkages between the domestic and the overseas commitments and whether any reduction in domestic investment could be matched by similar increases in investment in overseas coal power generation, thus leaking the emissions overseas rather than reducing them. Likewise, there are trade-offs between this commitment and other priorities such as the already existing “going global” objectives. 50 There is currently no public clearinghouse to track progress towards commitments

A CPI Report 16 November 2015 Slowing the Growth of Coal Power Outside China

6. Conclusion and next steps By sourcing and analyzing new data on China’s with high pollution and carbon emissions”. How this coal financing, we have identified China’s role in commitment is implemented and the impact it will international coal power generation deployment. have will ultimately depend on the outcome of the International lenders and investors are slowly filling negotiations, including pledges made by China and the void left by the retreat of developed countries’ more importantly by other countries. We estimate that development banks and export credit agencies’ from a potential USD 18 billion worth of coal power financing coal power lending. Over the last decade, China could be taken away from the international coal market has become a significant, serious and increasingly if China is ambitious in cutting finance for this sector. motivated provider of finance for coal power projects, To prevent construction of further polluting coal plants, driven by domestic economic and foreign policy however, it will be important for the international objectives. Reducing financing for this sector will community as well as for China and other public finance impact China in different ways in the coming years, with providers to ensure that no other major player moves domestic pressure to improve air quality and shrinking in to offer the finance that China is no longer providing. deployment targets for coal power plants being weighed In addition, there are alternative sources of finance against the Chinese government’s desire to keep its for coal, as evidenced by an increasingly number of national energy companies in strong financial shape. projects financed by local players in Turkey or Eastern Europe, which will not be affected by changes in the It is too early to decipher the true significance of China’s international financing. Domestic policies thus will announcement at the White House in September continue to play an important role in restricting the 2015 that it would phase out financing of “projects growth of coal power.

A CPI Report 17 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

Domestic [Government of of [Government Domestic ($825m) + DFI Botswana] + China ($243m) [IBRD] ($553m) [Sinosure] Policy

[Sinosure] China Policy ($365m) + DFI [AfDB] ($75m) [Sinosure] China Policy ($375m) DEBT China Policy [ExIm] ($467m) [ExIm] China Policy China Commercial [ICBC] China Commercial ($825m) + DFI [IBRD] ($136m) + DFI [AfDB] ($203m) ($1125m) Unknown China Policy [ExIm] ($300m) [ExIm] China Policy ($128m) + Unknown Unknown ($1575m) Unknown ($488m) Unknown China Commercial [Undisclosed] ($365m) + DFI ($150m) + DFI [Other [AfDB] ($75m) lenders (incl. DBSA)] ($1170m) [ExIm] China Policy & China [ExIm China Policy ($375m) Bank] Development [ICBC] + China Commercial ($375m) EQUITY Unknown - domestic - domestic Unknown ($200m) Botswana Power Corp. Corp. Power Botswana ($498m) Volta River Authority (VRA) Authority River Volta ($188m) + Sunon Asogli the joint venture Power, and Shenzhen (60%) between (40%) Fund the Development ($188m) Office National de l’Electricité National de l’Electricité Office ($143m) (ONE) Zimbabwe Power Company Power Zimbabwe ($330m) Investments Old Stone ($125m) + Shandong Taishan Sunlight ($125m) Pacific Energy ($263m) + HTG + HTG Energy ($263m) Pacific ($263m) Ventures Nava Bharat - ($156m) + Zambian govern ment ($84m) National Development National Development + Sichuan ($33m) Corporation ($130m) Hongda FROM $130m $188m $875m $263m $365m $825m $467m $300m $1,170m CONFIRMED CHINA, EXCL. GUARANTEES ($M) VALUE TOTAL $667m $570m $830m $650m $1,662m $2,100m $1,500m $1,500m $1,000m 2013 2017 2017 2016 2019 2016 2018 2018 YEAR 2009 STATUS / (Planning) (Planning) (Financed) (Financed) (Financed) (Permitted) (Permitted) (Operation) (Construction) NAME Project List MORUPULE B (600 MW) B (600 MORUPULE JERADA - EXTENSION (318 JERADA MW) GHANA COAL (700 MW) (700 GHANA COAL POWER KAMWAMBA I (300 - PHASE STATION MW) EZINMO POWER STATION STATION POWER EZINMO (1000 MW) MCHUCHUMA POWER POWER MCHUCHUMA (300 MW) STATION MINE POWER MAAMBA (300 MW) STATION THERMAL POWER HWANGE EXTENSION (600 STATION MW) I (600 MINE - PHASE GWAYI MW) GEO BOTSWANA BOTSWANA (AFRICA) MOROCCO MOROCCO (AFRICA) GHANA (AFRICA) MALAWI (AFRICA) NIGERIA (AFRICA) TANZANIA TANZANIA (AFRICA) ZAMBIA (AFRICA) ZIMBABWE (AFRICA) ZIMBABWE (AFRICA) Appendix 1.

A CPI Report 18 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

DEBT China Policy [CDB] ($863m) [CDB] China Policy China Policy [CDB] ($420m) [CDB] China Policy ($768m) [ExIm] China Policy [Undisclosed] China Policy ($546m) China Policy [CDB] ($416m) [CDB] China Policy China Policy [ExIm] ($114m) + ($114m) [ExIm] China Policy Reconstruction for DFI [Fund of and Development ($53m) Uzbekistan] China [Undisclosed] ($11250m) China Policy [ExIm] ($262m) [ExIm] China Policy [Undisclosed] China Policy ($638m) China Policy [ExIm] ($386m) [ExIm] China Policy China Policy [CDB] ($200m) [CDB] China Policy + DFI [Vnesheconombank] ($200m) EQUITY Comsar Energy ($288m) JP Elektroprivreda BiH d.d BiH d.d JP Elektroprivreda ($140m) JP Elektroprivreda BiH d.d BiH d.d JP Elektroprivreda ($136m) ($182m) - domestic Unknown EFT Rudnik i Termoelektrana EFT Rudnik i Termoelektrana - (ETF Group Stanari d.o.o. UK) ($104m) Uzbekenergo ($47m) Uzbekenergo Inter RAO ($1913m) + State ($1913m) + State RAO Inter China of Grid Corporation ($1838m) + Huaneng Group? ($0m) Far Eastern Generating Generating Eastern Far ($213m) Company (RusHydro) Unknown - domestic ($87m) - domestic Unknown Ministry of Industry, Energy Industry, of Ministry ($0m) Resources and Fuel Inter RAO UES ($300m) RAO Inter FROM $114m $416m $768m $262m $863m $638m $386m $546m $420m $200m $13,088m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $551m $214m VALUE TOTAL $728m $349m $520m $903m $560m $850m $700m $1,150m $15,000m 2017 2019 2016 2016 2019 2016 2014 2014 2018 2018 2022 2022 YEAR 2020? 2020? STATUS / (Planning) (Financed) (Financed) (Permitted) (Permitted) (Operation) (Financed?) (Announced) (Announced) (Construction) (Construction) NAME KAKANJ EXTENSION (KAKANJ B / KAKANJ UNIT 8) (300 MW) TUZLA EXTENSION (TUZLA B EXTENSION (TUZLA TUZLA MW) UNIT 7) (450 / TUZLA STATION POWER MAOCE (350 MW) UGLJEVIK 3 POWER STATION STATION UGLJEVIK 3 POWER MW) (600 STANARI THERMAL POWER THERMAL POWER STANARI PLANT (300 MW) ANGREN CHP (150 MW) MODERNIZATION USSURIYSK POWER STATION STATION POWER USSURIYSK MW) (370 POWER ERKOVETSKAYA (8000 MW) STATION EKIBASTUZ-2 POWER POWER EKIBASTUZ-2 - UNIT 3 (500 MW) STATION DUSHANBE POWER STATION STATION DUSHANBE POWER (100 MW) BISHKEK CHP POWER BISHKEK CHP POWER RECONSTRUCTION STATION (300 MW) GEO BOSNIA AND BOSNIA HERZEGOVINA EUROPE) (EAST BOSNIA AND BOSNIA HERZEGOVINA EUROPE) (EAST MONTENEGRO EUROPE) (EAST BOSNIA AND BOSNIA HERZEGOVINA EUROPE) (EAST BOSNIA AND BOSNIA HERZEGOVINA EUROPE) (EAST UZBEKISTAN UZBEKISTAN ASIA) (CENTRAL RUSSIA ASIA) (CENTRAL RUSSIA ASIA) (CENTRAL KAZAKHSTAN KAZAKHSTAN (CENTRAL ASIA) (CENTRAL TAJIKISTAN TAJIKISTAN ASIA) (CENTRAL KYRGYZSTAN KYRGYZSTAN ASIA) (CENTRAL

A CPI Report 19 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

of [Government Domestic ] ($293m)

Domestic [Government of of [Government Domestic Serbia] ($332m)

DEBT China Policy [Undisclosed] China Policy ($285m) ($975m) Unknown Unknown ($566m) Unknown ($293m) [ExIm] China Policy Unknown ($2025m) Unknown ($711m) [ExIm] China Policy ($356m) [CDB] China Policy [BNP Paribas] + International ($75m) ($60m) Unknown China Policy [ExIm] ($332m) [ExIm] China Policy Unknown ($1330m) Unknown EQUITY Unknown - domestic ($95m) - domestic Unknown CE Oltenia ($163m) + China CE Oltenia Huadian Engineering ($163m) Romanian Authority for for Authority Romanian Nuclear (RAAN) Activities Energy + China Power ($94m) ($94m) Co Ltd Srbije (EPS) Elektroprivreda ($42m) EPS ($63m) + Edison ($63m) EPS ($63m) + Edison ($0m) Eletrobras ($20m) Unknown Elektroprivreda ($225m) + China (EPS) Energy Environmental Holdings ($225m) + ($225m) Elektroprivreda Srbije (EPS) Srbije (EPS) Elektroprivreda ($59m) China Huadian Hong ($285m) Limited Kong + Bangladesh Power (BPDB) Board Development ($285m)

$94m $711m FROM $163m $332m $293m $356m $285m $285m $450m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $80m $614m VALUE $335m TOTAL $754m $837m $390m $380m $1,300m $1,900m $2,700m 2018 2010 YEAR 2006 2018? permit permit 2020? 2020? 2020? 2020? 2020? 2020? 2020? 2020? STATUS / (Planning) 2019 (Pre- 2019 (Pre- (Pre-permit (Pre-permit (Pre-permit (Pre-permit (Pre-permit (Pre-permit (Operation) (Operation) (Announced) development) development) development) development) development) (Construction) NAME PLJEVLJA POWER STATION - STATION POWER PLJEVLJA UNIT 2 (220 MW) ROVINARI POWER STATION STATION POWER ROVINARI EXTENSION (500 MW) STATION POWER HALANGA EXTENSION (290 MW) TPP B1 & TPP KOSTOLAC PLANT B2 POWER (300 MW) REPLACEMENT B3 POWER TPP KOSTOLAC PLANT (350 MW) KOLUBARA B POWER B POWER KOLUBARA MW) (750 STATION (EXTENSION) CANDIOTA-C (350 MW) (90 MW) UCH IGCC MAHESHKHALI POWER (AKA CHITTAGONG STATION (1320 MW) COAL-2) TPP NIKOLA TESLA POWER TESLA POWER TPP NIKOLA MW) PLANT (744 GEO MONTENEGRO MONTENEGRO (EAST EUROPE) (EAST ROMANIA (EAST (EAST ROMANIA EUROPE) (EAST ROMANIA EUROPE) SERBIA (EAST SERBIA (EAST EUROPE) SERBIA (EAST EUROPE) SERBIA (EAST SERBIA (EAST EUROPE) BRAZIL (SOUTH AMERICA) BANGLADESH ASIA) (SOUTH BANGLADESH ASIA) (SOUTH SERBIA (EAST SERBIA (EAST EUROPE)

A CPI Report 20 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

- DEBT China Policy [ExIm] ($188m) [ExIm] China Policy ($252m) Unknown Unknown ($1400m) Unknown ($1260m) Unknown ($2900m) Unknown Unknown ($2246m) Unknown China Commercial [ICBC] China Commercial ($1000m) + Unknown ($1496m) ($300m) [CDB] China Policy + China Commercial [Undisclosed] ($700m) Unknown ($1235m) Unknown China Various [CDB, Exim, and Exim, [CDB, China Various China] ($825m) + Bank of char [Standard International ($2115m) and others] tered EQUITY Bangladesh Power Bangladesh Power (BPDB) Board Development ($33m) Bangladesh Power Bangladesh Power (BPDB) Board Development ($108m) SEPCO III ($270m) III ($270m) SEPCO + Bangladesh Power (BPDB) Board Development ($270m) ($646m) + Power Akaltara ($54m) Ltd IFCI CMC -- China National CMC Machinery Import & Export Corporation (Group) Power ($300m) + North-West Company (a sub - Generation ($300m) BPDB) sidiary of Bharat Aluminum Company Bharat ($963m) Infrastructure Leasing Leasing Infrastructure Ltd & Financial Services + Huaneng Group ($535m) ($535m) ($176m) Infratech Lanco Talwandi Sabo Power Limited Limited Sabo Power Talwandi ($529m) Reliance Power ($1260m) Power Reliance

FROM $188m $825m $270m $300m $1,535m $1,000m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $221m VALUE TOTAL $360m $1,176m $1,765m $3,565m $1,800m $3,209m $3,600m $4,200m $2,000m 2015 YEAR 2006 2018? 2018? 2018? permit permit STATUS / 2011-2015 2011-2015 2017 (Pre- (Planning) (Planning) 2016 (Pre- (Operation) (Operation) 2013-2016 (?) 2013-2016 (?) 2013-2016 development) development) (Construction) (Construction) NAME BARAPUKURIA COAL POWER POWER COAL BARAPUKURIA I & II (250 PLANT - PHASE MW) BARAPUKURIA COAL POWER POWER COAL BARAPUKURIA III (250 MW) PLANT - PHASE STATION POWER KALAPARA (1320 MW) CHITTAGONG POWER POWER CHITTAGONG ALAM) (1320 (S STATION MW) MEGA ULTRA AKALTARA (3600 PROJECT POWER MW) POWER KORBA BALCO (3600 MW) STATION MOTA LAYJA POWER POWER LAYJA MOTA (AKA NANA LAYJA STATION (4000 PROJECT) POWER MW) VIDARBHA THERMAL VIDARBHA (1320 MW) STATION POWER POWER SABO TALWANDI (1980 MW) PROJECT SASAN ULTRA MEGA POWER POWER MEGA ULTRA SASAN (3960 MW) PROJECT GEO BANGLADESH BANGLADESH (SOUTH ASIA) (SOUTH BANGLADESH BANGLADESH ASIA) (SOUTH BANGLADESH ASIA) (SOUTH BANGLADESH BANGLADESH ASIA) (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA)

A CPI Report 21 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

[Sinosure] China Policy ($1190m)

DEBT Unknown ($827m) Unknown China Various [CDB, Exim, and Exim, [CDB, China Various + China] ($2616m) Bank of ($2616m) Unknown [ICBC] China Commercial ($1190m) Unknown ($93m) Unknown ($931m) Unknown China Policy [CDB] ($300m) [CDB] China Policy + China Commercial [Undisclosed] ($700m) China Policy [CDB] ($300m) [CDB] China Policy + China Commercial [Undisclosed] ($700m) China Policy [CDB] ($58m) + [CDB] China Policy ($58m) [ExIm] China Policy [The Bank of + International Ltd., UFJ Tokyo–Mitsubishi, Chartered HSBC, Standard lenders] Bank, and other ($893m) ($160m) [CDB] China Policy [ICBC] + China Commercial ($160m) + International Bank] Chartered [Standard ($160m) EQUITY Essar Energy ($355m) Reliance Power ($923m) Power Reliance SRM Energy ($210m) KSK Energy Ventures ($40m) Energy Ventures KSK Ltd. RattanIndia Power ($399m) Lanco Infratech ($176m) Infratech Lanco Lanco Infratech ($176m) Infratech Lanco CLP India ($292m) Adani Power ($85m) Power Adani

$115m FROM $320m $1,190m $2,616m $1,000m $1,000m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $133m VALUE TOTAL $565m $1,176m $1,176m $1,182m $6,156m $1,330m $1,300m $1,400m 2013 2014 2014 2010 2020 2020 YEAR / 2011 2016? / 2018? / 2018? 2008 (X) STATUS / financing) (Permitted) (Permitted) agreement) agreement) (Operation) (Operation) (Operation) 2010 (MOU 2010 (MOU & financing) (Announced) 2010 (finaing 2010 (finaing 2010 (LOI EPC 2010 (LOI (Construction) (Construction) NAME VS LIGNITE PLANT (135 MW) VS CUDDALORE SRM POWER SRM POWER CUDDALORE (1980 MW) STATION MAHAN SUPER THERMAL (UNIT 1 & PROJECT POWER 2) (1200 MW) AMRAVATI THERMAL AMRAVATI (AKA PROJECT POWER (1350 MW) JINDAL) OTHER RELIANCE OTHER PROJECTS POWER MW) (6156.14973262032 LANCO AMARKANTAK AMARKANTAK LANCO PROJECT THERMAL POWER (1320 MW) JHAJJAR POWER PLANT - POWER JHAJJAR I (1320 MW) PHASE TIRODA THERMAL POWER THERMAL POWER TIRODA MW) PLANT (660 BHOGNIPUR POWER (1320 MW) STATION GEO INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH ASIA)

A CPI Report 22 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

[Sinosure] China Policy ($1492m) DEBT Unknown ($882m) Unknown Unknown ($414m) Unknown ($3000m) Unknown ($882m) Unknown ($280m) Unknown Unknown ($414m) Unknown ($1294m) Unknown Unknown ($647m) Unknown ($490m) Unknown ($323m) Unknown Unknown ($431m) Unknown ($294m) Unknown China Commercial [Undisclosed] ($1571m) EQUITY Adani Power ($294m) Power Adani Adani Power ($294m) Power Adani ($120m) K-Electric Reliance Power ($177m) Power Reliance ($1000m) Power Reliance Reliance Power ($177m) Power Reliance Dongfang Electric ($277m) + ($277m) Asiapak Investments All Pakistan Textile Mills Textile All Pakistan Association (APTMA) ($139m) Harbin ($139m) + K-Electric Harbin ($139m) + K-Electric ($139m) ($210m) Burj Power J-Energy and Sino-Sindh J-Energy and Sino-Sindh ($185m) (SSRL) Ltd Resources Company ($0m) Hub Power Undisclosed ($126m)

FROM $139m $277m $1,571m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $591m $591m $616m VALUE TOTAL $924m $462m $420m $700m $1,176m $1,176m $400m $1,848m $1,848m $4,000m 2017 2017 2012 2014 2014 2018 2010 YEAR 2017? 2017? 2016? 2016? 2018? 2018? 2018? STATUS / (Planning) (Planning) (Planning) (Permitted) (Pre-permit (Pre-permit (Operation) (Operation) (Operation) (Announced) (Announced) (Announced) (Announced) development) (Construction) NAME UDUPI POWER PLANT (1320 UDUPI POWER MW) CHITRANGI POWER PROJECT PROJECT CHITRANGI POWER (3960 MW) THERMAL POWER KAWAI I (1320 - PHASE PROJECT MW) STATION POWER BIN QASIM / COAL - REPOWERING MW) (420 CONVERSION STATION POWER BIN QASIM (1320 (ASIAPAK/DONGFANG) MW) ROSA PHASE I (600 MW) I (600 PHASE ROSA ROSA PHASE II (600 MW) II (600 PHASE ROSA STATION POWER K-ELECTRIC MW) (660 PORT QASIM BURJ POWER BURJ POWER QASIM PORT (500 MW) STATION SSRL POWER QASIM PORT MW) (440 STATION - STATION POWER GWADAR ECONOMIC CHINA-PAKISTAN (300 MW) CORRIDOR? APTMA POTHOHAR POWER POWER POTHOHAR APTMA MW) (330 STATION - STATION POWER HUBCO ECONOMIC CHINA-PAKISTAN (1320 MW) CORRIDOR GEO INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH ASIA) PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH INDIA (SOUTH INDIA (SOUTH ASIA) INDIA (SOUTH INDIA (SOUTH ASIA) PAKISTAN ASIA) (SOUTH PAKISTAN PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH PAKISTAN PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH

A CPI Report 23 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES China Policy [Sinosure] [Sinosure] China Policy ($1229m)

China Policy [Sinosure] [Sinosure] China Policy ($1050m) DEBT China Commercial [ICBC] China Commercial ($1294m) Unknown ($539m) Unknown ($539m) Unknown ($1365m) Unknown ($294m) Unknown China Policy [CDB] ($1105m) [CDB] China Policy [ICBC] China Commercial ($265m) [ICBC] China Commercial ($1050m) China Commercial China Commercial [Undisclosed] ($1105m) EQUITY China Power International International China Power ($554m) (CPI) Power China ($118m) + Power Qatar Capital of Al-Mirqab ($113m) Power China ($298m) + Al Power ($287m) Malaki Group ($126m) CMEC Power China ($118m) + Power Qatar Capital of Al-Mirqab ($113m) Thar Power Company Thar Power ($195m) (THARCO) Shandong Ruyi Technology ($113m) Group Huaneng Shandong Electricity Huaneng Shandong Electricity ($225m) + Shandong Ruyi ($225m) Group SEPCO ($20m) + Oracle ($20m) + Oracle SEPCO Coalfields Plc ($176m) FROM $118m $118m $126m $378m $298m $1,125m $1,105m $1,848m $1,500m CONFIRMED CHINA, EXCL. GUARANTEES ($M) VALUE TOTAL $378m $770m $770m $420m $1,950m $1,848m $1,300m $1,300m $1,500m 2017 2019 2018 YEAR 2019? 2019? 2016? 2018? 2018? 2018? STATUS / (Permitted) (Pre-permit (Pre-permit (Announced) (Announced) (Announced) (Announced) (Announced) development) (Construction) (Construction) NAME THAR SSRL POWER THAR SSRL POWER - CHINA-PAKISTAN STATION (1320 CORRIDOR ECONOMIC MW) PORT QASIM EPC POWER EPC POWER QASIM PORT I - CHINA- - PHASE STATION ECONOMIC PAKISTAN MW) (660 CORRIDOR PORT QASIM EPC POWER EPC POWER QASIM PORT II - CHINA- - PHASE STATION ECONOMIC PAKISTAN MW) (660 CORRIDOR STATION POWER KARACHI QASIM (AKA PORT (1320 MW) KARACHI) RANGE POWER SALT - CHINA-PAKISTAN STATION (300 CORRIDOR ECONOMIC MW) POWER THAR ENGRO - CHINA-PAKISTAN STATION (660 CORRIDOR ECONOMIC MW) THAR BLOCK VI POWER VI POWER THAR BLOCK - CHINA-PAKISTAN STATION (600 CORRIDOR ECONOMIC MW) - STATION POWER SAHIWAL ECONOMIC CHINA-PAKISTAN (1320 MW) CORRIDOR FAISALABAD FIEDMC FIEDMC FAISALABAD MW) (270 STATION POWER GEO PAKISTAN PAKISTAN (SOUTH ASIA) (SOUTH PAKISTAN PAKISTAN ASIA) (SOUTH PAKISTAN PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH PAKISTAN PAKISTAN ASIA) (SOUTH PAKISTAN ASIA) (SOUTH PAKISTAN PAKISTAN ASIA) (SOUTH

A CPI Report 24 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

DEBT Unknown ($118m) Unknown China Policy [ExIm] ($891m) [ExIm] China Policy Unknown ($380m) Unknown ($507m) Unknown [Undisclosed] Domestic ($105m) + China Commercial China] ($35m) [Bank of China Policy [ExIm] ($455m) [ExIm] China Policy ($265m) Unknown China Policy [CDB] ($94m) ($94m) [CDB] China Policy [Asosiasi Bank + Domestic ($94m) (ASBANDA)] Daerah China Commercial [Bank of [Bank of China Commercial China] ($190m) + Unknown ($8m) EQUITY Eden Group ($50m) Group Eden Ceylon Electricity Board Board Ceylon Electricity ($157m) Cambodia International Cambodia International Development Investment ($81m) + (CIIDG) Group Huadian ($81m) Cambodia International Development Investment ($109m) + (CIIDG) Group Huadian ($109m) Cambodia International Development Investment ($15m) + (CIIDG) Group Universal Holdings Leader Berhad ($15m) Ceylon Electricity Board Board Ceylon Electricity ($80m) Huaneng Lancangjiang China of Co. Hydropower - ($38m) + Myanmar govern Trading ment ($38m) + Htoo ($38m) Co.

PT Bukit Asam, PT PLN, and (joint Group MAXpower ($0m) venture)

$81m $35m $38m $94m FROM $891m $109m $190m $455m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $170m $168m VALUE $378m TOTAL $535m $724m $543m $269m $264m $1,048m 2013 2012 2015 2015 2014 2014 2014 2014 2005 YEAR 2017? 2018? STATUS / (Permitted) (Operation) (Operation) (Operation) (Operation) (Operation) (Announced) (Construction) (Construction) NAME SIHANOUKVILLE CID POWER SIHANOUKVILLE CID POWER (405 - UNIT 1-3 STATION MW) HTANTABIN POWER STATION STATION POWER HTANTABIN MW) (270 SIHANOUKVILLE CID POWER SIHANOUKVILLE CID POWER (540 - UNIT 4-7 STATION MW) SIHANOUKVILLE CEL (100 MW) POWER BANJARSARI (220 MW) STATION LAKVIJAYA POWER POWER LAKVIJAYA I (AKA PLANT PHASE 1) (300 NOROCHCHOLAI MW) LAKVIJAYA POWER POWER LAKVIJAYA II (AKA PLANT PHASE 2) (300 NOROCHCHOLAI MW) PLANT (120 POWER TIGYIT MW) TELUK SIRIH POWER TELUK SIRIH POWER MW) (224 STATION GEO CAMBODIA (SOUTHEAST ASIA) MYANMAR MYANMAR (SOUTHEAST ASIA) CAMBODIA (SOUTHEAST ASIA) CAMBODIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) SRI LANKA (SOUTH ASIA) (SOUTH SRI LANKA ASIA) (SOUTH MYANMAR (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA)

A CPI Report 25 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

DEBT Unknown ($341m) Unknown Unknown ($38m) Unknown ($90m) Unknown Unknown ($84m) Unknown China Policy [Undisclosed] China Policy ($88m) ($88m) + Unknown China Policy [Undisclosed] China Policy ($105m) ($105m) + Unknown ($336m) Unknown ($124m) [ExIm] China Policy ($74m) + Unknown Unknown ($185m) Unknown ($25m) Unknown EQUITY Madhucon Group ($114m) Group Madhucon PT PLN ($30m) PT PT PLN ($13m) PT PT PLN ($36m) PT Bosowa Group ($75m) Group Bosowa PT PLN ($66m) PT PT PLN ($144m) PT Bosowa Group ($90m) Group Bosowa PT PLN ($79m) PT Power Pusaka Jaya Palu PT ($11m)

$88m FROM $124m $105m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $36m $50m $120m $120m VALUE TOTAL $455m $264m $264m $250m $300m $480m 2011 2013 2017 2012 2015 2015 2014 2014 YEAR 2006 permit permit STATUS / 2017 (Pre- 2015 (Pre- (Operation) (Operation) (Operation) (Operation) (Operation) development) development) (Construction) (Construction) (Construction) NAME KALTENG-1 PULANG PISAU PULANG PISAU KALTENG-1 (120 MW) STATION POWER STATION POWER SUMSEL-7 (300 MW) AMURANG POWER STATION STATION AMURANG POWER (50 MW) PUNAGAYA POWER STATION STATION POWER PUNAGAYA I (250 MW) - PHASE PUNAGAYA POWER STATION STATION POWER PUNAGAYA II (250 MW) - PHASE PANGKALAN SUSU POWER SUSU POWER PANGKALAN - UNIT 3&4 (400 STATION MW) TELUK BALIKPAPAN KALTIM - UNIT 1&2 STATION POWER (220 MW) STATION POWER BARRU SELATAN (AKA SULAWESI STATION) POWER (SULSEL) (100 MW) PALU POWER STATION STATION POWER PALU (30 SULAWESI) (CENTRAL MW) POWER RAYA NAGAN (AKA MEULABOH STATION - ACEH) STATION, POWER UNIT 1&2 (220 MW) GEO INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA)

A CPI Report 26 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

[BKPM] ($200m) Domestic DEBT China Policy [ExIm] ($293m) [ExIm] China Policy China Policy [CDB] ($277m) + [CDB] China Policy ($277m) Unknown China [Undisclosed] ($408m) ($700m) [CDB] China Policy ($308m) [ExIm] China Policy ($255m) + Unknown ($318m) [CDB] China Policy ($1200m) [ExIm] China Policy ($481m) [ExIm] China Policy ($370m) + Unknown ($124m) [ExIm] China Policy ($61m) + Unknown ($146m) [ExIm] China Policy EQUITY PT PLN ($463m) PT PT PLN ($238m) PT Primadya Sumber Segara PT ($92m) (S2P) ($42m) Sinar Mas Group China Huadian Indonesia Bukit Asam ($215m) + PT Tbk ($176m) (PTBA) PLN ($284m) PT PLN ($79m) PT PT Sumber Segara Primadya Sumber Segara PT ($102m) (S2P) PLN ($188m) PT PLN ($26m) PT FROM $124m $318m $146m $481m $277m $293m $308m $700m $408m $1,415m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $172m $510m VALUE TOTAL $756m $792m $792m $750m $264m $360m $1,134m $1,590m 2011 2011 2015 2015 2015 2016 2019 2016 YEAR 2006 2009 STATUS / (Permitted) (Operation) (Operation) (Operation) (Operation) (Construction) (Construction) (Construction) (Construction) (Construction) NAME ADIPALA POWER STATION STATION POWER ADIPALA POWER (AKA BUNTON MW) (660 STATION) CILACAP SUMBER POWER POWER SUMBER CILACAP (UNIT 1 & 2) (600 STATION MW) SUMBER CILACAP (UNIT 3 STATION POWER MW) (660 EXPANSION) - UNIT 8 (625 SURALAYA MW) STATION POWER SUMSEL-5 SELATAN- (AKA SUMATERA 5) (300 MW) (SS-8) TENGAH BANGKO (AKA STATION POWER 8) - SOUTH SUMATRA MW) I (1240 PHASE POWER PELABUHAN RATU MW) (945 STATION TENAYAN PEKANBARU (AKA RIAU STATION POWER (220 NAD) - PLTU TENAYAN MW) POWER BARU PARIT (100 MW) STATION STATION POWER PACITAN MW) (630 GEO INDONESIA (SOUTHEAST (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA)

A CPI Report 27 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

China Policy [Sinosure] [Sinosure] China Policy ($353m) [Sinosure] China Policy ($143m) [Sinosure] China Policy ($432m) China Policy [Sinosure] [Sinosure] China Policy ($562m) DEBT Unknown ($300m) Unknown China Commercial [Bank of [Bank of China Commercial China] ($372m) China Policy [CDB] ($131m) + [CDB] China Policy ($261m) Unknown ($150m) [ExIm] China Policy ($571m) [CDB] China Policy ($563m) Unknown ($567m) Unknown [Bank of China Commercial China] ($455m) ($308m) [ExIm] China Policy ($287m) + Unknown China Commercial [China [China China Commercial ($118m) Construction Bank] [Undisclosed] + Domestic ($474m) EQUITY PT PLN ($100m) PT PT PLN ($217m) PT PT PLN ($168m) PT China Huadian ($190m) PT PLN ($6m) PT PLN ($188m) PT PLN ($189m) PT PLN ($201m) PT PLN ($198m) PT PT PLN ($102m) PT

$131m FROM $118m $761m $150m $372m $455m $308m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $761m $156m VALUE TOTAL $756m $792m $750m $588m $694m $560m $805m $400m 2011 2011 2011 2013 2012 2012 2012 2015 2010 2005 YEAR STATUS / (Operation) (Operation) (Operation) (Operation) (Operation) (Operation) (Operation) (Operation) (Operation) (Construction) NAME REMBANG POWER STATION STATION POWER REMBANG MW) (630 TANJUNG KASAM POWER POWER KASAM TANJUNG (130 MW) STATION POWER CELUKAN BAWANG MW) (426 STATION POWER SURALAYA BANTEN MW) - UNIT 8 (625 STATION POWER LABUAN BANTEN MW) (630 STATION POWER LONTAR BANTEN (AKA TELUK NAGA) STATION MW) (945 POWER BARU PLN PAITON (AKA PAITON STATION MW) (660 UNIT-9) JAWA- PEMBANGKITAN PT (600 (EARLIER UNITS) BALI MW) TANJUNG AWAR-AWAR, AWAR-AWAR, TANJUNG MW) (700 JAVA EAST INDRAMAYU POWER POWER INDRAMAYU (990 MW) STATION GEO INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST ASIA) INDONESIA (SOUTHEAST (SOUTHEAST ASIA)

A CPI Report 28 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

China Policy [Sinosure] [Sinosure] China Policy ($468m)

DEBT Unknown ($375m) Unknown ($501m) Unknown China Policy [CDB] ($493m) [CDB] China Policy ($207m) + Unknown ($262m) Unknown ($1365m) Unknown ($1320m) DFI [ADB] Unknown ($540m) Unknown ($128m) Unknown ($750m) Unknown China Policy [Undisclosed] China Policy ($350m) + Unknown ($350m) ($592m) Unknown EQUITY Datang ($125m) Filinvest ($167m) Filinvest Sithe Global Power Sithe Global Power ($150m) + Group) (Blackstone ($150m) Corporation Ayala ($44m) + Cẩm Vinacomin Joint- Ph ẩ Thermal-power Company ($43m) Stock Group Plastics Formosa + China Steel ($556m) ($29m) Grid China Southern Power Company ($110m) + CPIC ($110m) Vinacomin + ($110m) New Asia Group ($21m) + New Asia Group Partner Unidentified Chinese ($21m) ($250m) Mogul Power Sarawak Energy ($180m) Sarawak GNPower Kauswagan Kauswagan GNPower ($300m) Group Plastics Formosa ($13m) + China Steel ($241m)

$13m $21m $29m FROM $125m $493m $350m $220m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $170m VALUE TOTAL $349m $720m $845m $668m $500m $1,950m $1,650m $1,000m $1,000m $1,000m - 2011 2015 2015 2016 2018 2018 2020 2020 YEAR 2016? 2018? permit STATUS / 2017 (Pre- ing) / 2013 (Permitted) (Permitted) (Operation) (Operation) (Announced) (Announced) 2010 (financ development) (Construction) (Construction) (Construction) (Construction) NAME MADURA PTBA POWER POWER MADURA PTBA MW) (400 STATION BALINGIAN NEW POWER NEW POWER BALINGIAN I (600 - PHASE STATION MW) PLANT - MARIVELES POWER MW) I (600 PHASE LANAO KAUSWAGAN KAUSWAGAN LANAO MW) (552 STATION POWER HA TINH FORMOSA COMPLEX STEEL PLASTICS I - PHASE STATION POWER MW) (650 - STATION POWER VINH TAN (1200 MW) V ẩ NH TÂN-1 TELMEN THERMAL POWER TELMEN THERMAL POWER PLANT (100 MW) GOBI POWER TEVSHIIN MW) (600 STATION POWER ORIENTAL MISAMIS MW) (405 STATION MISAMIS ORIENTAL POWER POWER ORIENTAL MISAMIS (540 MW) STATION HA TINH FORMOSA COMPLEX STEEL PLASTICS II - PHASE STATION POWER (1500 MW) GEO INDONESIA (SOUTHEAST (SOUTHEAST ASIA) MALAYSIA MALAYSIA (SOUTHEAST ASIA) PHILIPPINES (SOUTHEAST ASIA) PHILIPPINES (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) MONGOLIA MONGOLIA ASIA) (SOUTH MONGOLIA ASIA) (SOUTH PHILIPPINES (SOUTHEAST ASIA) PHILIPPINES (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA)

A CPI Report 29 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

[Sinosure] China Policy ($633m)

China Policy [Sinosure] [Sinosure] China Policy ($479m) DEBT China Policy [ExIm] ($179m) [ExIm] China Policy China Policy [CDB] ($673m) ($673m) [CDB] China Policy Bank [Japan + International Cooperation, International for Bank of Mitsui, Sumitomo HSBC, UFJ, Tokyo-Mitsubishi Suisse and Intesa Credit ($327m) SanPaolo] ($960m) Unknown ($333m) [CDB] China Policy [Bank + China Commercial + China China] ($333m) of [ICBC] ($333m) Commercial ($210m) [ExIm] China Policy ($210m) + DFI [JBIC] ($210m) [ExIm] China Policy ($210m) + DFI [JBIC] Unknown ($880m) Unknown China Policy [ExIm] ($300m) [ExIm] China Policy + DFI [Vietnam Development ($805m) Bank] China Policy [ExIm] ($504m) [ExIm] China Policy from [Banks + International ($504m) France] ($1157m) Unknown EQUITY Electricity of Vietnam of ($32m) Electricity Vinacomin ($92m) + Cẩm ($92m) Vinacomin Joint- Ph ẩ Thermal-power Company ($88m) Stock PetroVietnam ($200m) PetroVietnam ($120m) + CLP Group ($120m) Mitsubishi + Cẩm ($92m) Vinacomin Joint- Ph ẩ Thermal-power Company ($88m) Stock Vietnam Electricity Group Vietnam Group Electricity ($500m) CLP Group ($73m) + CLP Group ($73m) + Mitsubishi Vietnam of ($73m) Electricity Electricity of Vietnam of Electricity ($195m) MMC Corporation Berhad Corporation MMC ($386m) Vietnam Electricity Group Vietnam Group Electricity ($592m)

$73m FROM $179m $210m $120m $210m $673m $504m $300m $1,000m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $211m VALUE TOTAL $600m $600m $1,100m $1,542m $1,300m $1,200m $1,200m $1,500m $1,600m 2011 2011 2015 2015 2016 2018 2014 2014 2014 2018 2020 2020 YEAR STATUS / (Permitted) (Permitted) (Pre-permit (Pre-permit (Operation) (Operation) (Operation) (Operation) development) (Construction) (Construction) (Construction) NAME VUNG ANG POWER STATION STATION VUNG ANG POWER I (1200 MW) - PHASE VUNG ANG POWER STATION STATION VUNG ANG POWER II (1200 MW) - PHASE DUYEN HAI POWER - COMPLEX GENERATION MW) I (1245 PHASE HAI PHONG THERMAL I - PHASE STATION POWER (300 MW) HAI PHONG THERMAL II - PHASE STATION POWER (300 MW) UONG BI POWER STATION - STATION UONG BI POWER UNIT EXPANSION UÔNG BÍ-2 MW) 8 (330 VINH TAN POWER STATION - STATION POWER VINH TAN MW) (1245 V ẩ NH TÂN-2 VINH TAN POWER STATION - STATION POWER VINH TAN (1980 MW) V ẩ NH TÂN-3 DUYEN HAI POWER DUYEN HAI POWER - COMPLEX GENERATION II (1200 MW) PHASE DUYEN HAI POWER - COMPLEX GENERATION III (UNIT 1 & 2) (1200 PHASE MW) GEO VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA)

A CPI Report 30 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES China Policy [Sinosure] [Sinosure] China Policy [MOF + Domestic ($261m) Vietnam] ($171m)

DEBT China Commercial [Bank China Commercial + China] ($275m) of [BNP Paribas] International ($171m) China Policy [ExIm] ($510m) [ExIm] China Policy ($484m) Unknown ($850m) [ExIm] China Policy ($1209m) Unknown Unknown [but not Chinese] [but not Unknown ($1400m) ($700m) Unknown China Policy [Undisclosed] China Policy ($430m) Unknown [Domestic or [Domestic Unknown Chinese] ($966m) ($900m) Unknown - EQUITY Vinacomin ($111m) Vinacomin Hanoi Export-Import Hanoi Export-Import Company ($161m) Development Power Iran Company ($150m) Shanghai Electric Power International ($259m) + AVIC ($15m) + 4 Co. Equipment partners ($244m) Turkish Quang Ninh Thermal Power Quang Ninh Thermal Power Company ($90m) Joint Stock CIC ($105m) + AES ($281m) ($165m) POSCO Hattat Holding ($150m) + Equipment International AVIC ($150m) Co. İÇDAŞ ($76m) İÇDAŞ ment firm) ($150m) Teyo Yatırım ve Dış Ticaret Dış Ticaret ve Yatırım Teyo Energy A.Ş ($150m) + Weiqu invest (Chinese Investments Diler Holding ($170m)

FROM $510m $105m $150m $150m $275m $275m $430m $850m CONFIRMED CHINA, EXCL. GUARANTEES ($M) VALUE TOTAL $557m $645m $506m $600m $1,136m $1,727m $1,950m $1,200m $1,000m $1,000m 2011 2012 2015 2015 2018 2010 YEAR 2009 permit 2020? 2020? 2020? 2020? STATUS / 2017 (Pre- (Permitted) (Pre-permit (Pre-permit (Operation) (Operation) (Operation) (Operation) development) development) (Construction) (Construction) (Construction) NAME QUANG NINH POWER NINH POWER QUANG - QU ẩ NG NINH-1 STATION MW) (600 MAO KHE POWER STATION STATION KHE POWER MAO MW) (440 THANG LONG POWER POWER THANG LONG MW) (600 STATION DUONG POWER MONG D ẩẩ NG-2 - MÔNG STATION (1120 MW) HUNUTLU POWER EMBA (AKA YUMURTALIK STATION STATION) POWER EMBA (1320 MW) POWER BARTIN AMASRA (AKA HEMA / STATION SEA / BATI BLACK WESTERN KARADENIZ) (1320 MW) TABAS POWER PLANT (650 PLANT (650 POWER TABAS MW) POWER BEKIRLI BIGA MW) (405 STATION ATLAS ENERJI POWER ENERJI POWER ATLAS (AKA ISKENDERUN STATION - UNIT 1 & 2 (1250 ATLAS) MW) TEYO TUFANBEYLI POWER POWER TUFANBEYLI TEYO MW) (700 STATION GEO VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) VIETNAM (SOUTHEAST ASIA) TURKEY ASIA) (WESTERN TURKEY ASIA) (WESTERN IRAN (WESTERN IRAN (WESTERN ASIA) TURKEY ASIA) (WESTERN TURKEY ASIA) (WESTERN TURKEY ASIA) (WESTERN

A CPI Report 31 November 2015 Slowing the Growth of Coal Power Outside China GUARANTEES

DEBT Unknown ($818m) Unknown Unknown ($563m) Unknown ($102m) Unknown Unknown ($348m) Unknown Unknown ($441m) Unknown ($338m) Unknown Unknown ($365m) Unknown EQUITY İÇDAŞ ($273m) İÇDAŞ Bereket Enerji Üretim A.Ş. Enerji Üretim Bereket ($34m) Ordu Yardımlaşma Kurumu Yardımlaşma Ordu Holding 50%), Koç (OYAK, (25%), AES Corporation (25%) ($188m) Hidro-Gen Enerji Ithalat Hidro-Gen A.Ş. Ticaret Dağıtım ve Ihracat ($116m) Group) (Kolin Polat Madencilik (Turkish coal coal Madencilik (Turkish Polat + ($74m) mining company) Energy Zhejiang Provincial ($74m) Group A.Ş. Silopi Elektrik Üretim ($113m) Group) (Ciner İÇDAŞ ($122m) İÇDAŞ

$74m FROM $60,523m CONFIRMED CHINA, EXCL. GUARANTEES ($M) $136m VALUE TOTAL $750m $588m $486m $450m $464m $1,091m $157,410m 2017 2017 2014 2014 2010 YEAR 2009 2016? permit (Partially (Partially STATUS / (Planning) 2019 (Pre- (Operation) (Operation) development) (Construction) (Construction) commissioned) NAME ÇANKIRI ORTA POWER POWER ÇANKIRI ORTA (150 MW) STATION AYAS POWER STATION (600 (600 STATION POWER AYAS MW) İÇDAŞ BEKIRLI POWER BEKIRLI POWER İÇDAŞ (1200 MW) STATION POWER KOLIN SOMA (510 MW) STATION EYNEZ POWER STATION STATION EYNEZ POWER MW) (647 ICDAS STEEL PLANT SELF- STEEL ICDAS GEN (389 MW) ŞIRNAK SILOPI POWER POWER ŞIRNAK SILOPI I, II, III) (AKA SILOPI STATION MW) (405 GEO TURKEY ASIA) (WESTERN TURKEY (WESTERN ASIA) (WESTERN TURKEY ASIA) (WESTERN TURKEY ASIA) (WESTERN TURKEY ASIA) (WESTERN TURKEY ASIA) (WESTERN TURKEY ASIA) (WESTERN

A CPI Report 32