Belt and Road Initiative Research

Report Release: Identifying Potential Debt-for- Development Swaps (DDS) Partners to China：From Subjective Assessment to a Scoring System 债务置换发展（DDS）项目中债务国的识别和筛选：从主观判断到评分系统

Debt-for-Development Swaps (DDS) are agreements between a debtor country and its creditor(s) (bilateral or commercial) to replace its public and publicly guaranteed external debt with liabilities that entail spending commitments over time towards a specific development goal, such as renewable energy, education and healthcare. By converting external debt repayments into domestic investment, DDS provides long-term, stable financing to support the achievement of the United Nations Sustainable Development Goals (SDGs).

As an emerging major bilateral creditor, China’s engagement in DDS can help curb default risks, reduce potential losses stemming from sovereign debt distress, and aligns the objectives of the Belt and Road Initiative, the SDGs, and the green-transition agendas of partner countries – to enhance China’s leadership role in global development finance.

In this context, the International Institute of Green Finance (IIGF) of the Central University of Finance and Economics (CUFE) has developed the DDS Partner Scoring Index (DDS-PSI) to evaluate the suitability of debtor countries for DDS cooperation with China. The index is consisted of four first-level criteria – debt vulnerability, development potential, political feasibility, and bilateral relations with China – measured across 26 secondary indicators.  The index is expected to provide a rigorous analytical foundation for identifying China’s potential DDS partner countries.

债务置换发展（Debt-for-Development Swaps，DDS）机制通过债务国和债权人（双边或商业债权人）之间的协议，将债务国的公共和公共担保外债转化为专门用于支持债务国优先发展领域的长期资金安排，如可再生能源、教育、卫生等领域。通过把偿债负担转化为国内投资，DDS既减轻了债务国的财政压力，也为其实现联合国可持续发展目标（SDGs）提供长期、稳定的资金来源。

中国作为新兴债权国之一，参与债务置换发展（DDS）有助于降低债务国违约风险、减少债务国主权债务违约造成的损失，并与“一带一路”倡议等对外合作机制、联合国可持续发展目标和债务国绿色转型议程相融合，展示中国的负责任大国形象。

在此背景下，中央财经大学绿色金融国际研究院（IIGF）开发了DDS合作伙伴评分指数（DDS-PSI），用于衡量债务国与中国实施DDS的适宜性。该评分指数包括债务国的债务脆弱性、发展潜力、政治可行性，以及与中国的双边关系4个一级变量和26个二级变量，为中国筛选DDS伙伴债务国提供有价值的参考。

Report Release: Identifying Potential Debt-for- Development Swaps (DDS) Partners to China：From Subjective Assessment to a Scoring System 债务置换发展（DDS）项目中债务国的识别和筛选：从主观判断到评分系统

Debt-for-Nature Swaps (DNS) can help developing countries address both external debt repayment pressures and environmental challenges. Over the past few years, DNS has increasingly become a focus of attention. China is one of the major emerging bilateral creditor countries. DNS can help China reduce losses caused by sovereign debt defaults, enhance bilateral relations with debtor countries, and highlight China’s assertive leadership role in global ecological and environmental governance and sustainable development. Due to the large number of debtor countries with which China has bilateral debts, the complexity of the DNS mechanism and high transaction costs, making the selection of debtor countries crucial for China.

With support from The Nature Conservancy (TNC), the International Institute of Green Finance (IIGF) at the Central University of Finance and Economics conducted a study on a country selection scoring system for DNS. This scoring system includes four primary variables: the debtor country’s debt and fiscal situation, the debtor country’s environmental assets, the political and legal environment of the debtor country, and the bilateral relationship between the debtor country and China, as well as 23 secondary variables. The authors hope that this scoring system will provide meaningful reference for selecting debtor countries suitable for implementing DNS with China.

Report Series on China and Africa’s Energy Transition. From Green Energy to Green Hydrogen: The Role of Chinese Investments in Egypt’s Future Energy Landscape

This report comprehensively analyzes the complexities, obstacles, and potential pathways for deploying green hydrogen projects in Egypt, with a focus on the involvement of Chinese companies across technology supply, construction, financing, and partnership development. 

The research was conducted by Wei Shen and Han Chen, senior research fellows at IIGF, along with Dalia Ibrahiem, a Professor at Cairo University. This report was commissioned by the African Climate Foundation (ACF) which we gratefully acknowledge. It was produced independently by IIGF and the contents represent the views of IIGF and its researchers and not necessarily that of the ACF.

Report Series on China and Africa’s Energy Transition. Advancing Mineral-Energy Nexus for Development (MEND) in Africa: From a Concept to Practices

The report offers a comprehensive analysis of the complexities associated with foreign investments in the mining sector in low-income countries, with a particular emphasis on Sub-Saharan Africa. It examines challenges and opportunities related to power supply, infrastructure development, community engagement, and regulatory frameworks, while proposing a MEND (Mineral-Electricity Nexus for Development) approach framework to address these multifaceted issues.

Led by Wei Shen and Zhengyun Zhou from IIGF, along with Prof. Tsitsi Musasike from Boston University and Dr. Tinotenda Chidhawu from the University of the Western Cape and the University of Zimbabwe, the research aims to provide insights into sustainable energy supply for critical mining activities in Africa. This report was commissioned by the African Climate Foundation (ACF) which we gratefully acknowledge. It was produced independently by IIGF and the contents represent the views of IIGF and its researchers and not necessarily that of the ACF. 

Policy Brief: Chinese Investments Amid The Energy Crises And Mineral Treasures In Zimbabwe

The policy brief series aims to explore cases in Zimbabwe, Egypt, Ethiopia, and other African countries to understand the role of Chinese financiers and corporations in shaping renewable energy activities and their impact on energy transition pathways, addressing the heterogeneity among African countries and capturing symbiotic links with governance, market development, and value chain integration.

The International Institute for Green Finance (IIGF) of Central University of Finance and Economics (CUFE), worked on the policy brief commissioned by the African Climate Foundation (ACF) and conducted independently by IIGF’s senior researcher Wei Shen and Zhengyun Zhou, assistant research fellow at IIGF.

CHINA’S ROLE IN EGYPT’S LOW- CARBON ENERGY TRANSITION: From Renewable Energy to Green Hydrogen

The policy brief examines China’s involvement in Egypt’s national energy transition, focusing on Chinese renewable energy production and green hydrogen activities, and the challenges faced by Chinese investors in competing with other countries in the MENA region, as well as China’s competitiveness in providing technological and financial support for Egypt to become a regional hub for green electricity and hydrogen production.

The report was prepared by a senior research fellow at IIGF, Wei Shen, and a research fellow at IIGF Han Chen. This report was commissioned by the African Climate Foundation (ACF) which we gratefully acknowledge. It was produced independently by IIGF and the contents represent the views of IIGF and its researchers and not necessarily that of the ACF.

Project Summary: The BRI Renewable Energy Database

The “Belt and Road” Initiative Renewable Energy Database Project aims to provide comprehensive information to regulatory institutions, companies, and financial institutions, by describing the locations, scales, and current development of Chinese investment and financing in the renewable energy sector in countries along the “Belt and Road” route, and exploring potential areas, technologies, and financing types for future green investments.

This project is sponsored by Energy Foundation and comprises two parts – the renewable energy database and the case studies report.

IIGF Report: The “BRI” Renewable Energy Project Case Studies Report

With the support of the Energy Foundation, the International Institute of Green Finance of the Central University of Finance and Economics compiled the “Belt and Road” renewable energy database and the supporting research report “The Belt and Road Renewable Energy Study Case Analysis”. The report analyzes the specific characteristics of renewable energy deployment in different BRI regions and it analyzes representative study cases of 5 BRI projects in Asia, Africa and South AmericaThrough this analysis, the report put forward policy recommendations to promote more efficient renewable energy deployment in overseas investment and financing projects. The report was disseminated among key stakeholders and we hope it will contribute to the construction of high-quality, green Belt and Road.

IIGF | In-depth analysis of the “Guidelines for Ecological and Environmental Protection in Overseas Investment and Cooperation Construction Projects”

Over the past years, China has become one of the most important sources of infrastructure funding in the developing world through its Belt and Road Initiative On January 6, 2022, China’s Ministry of Ecology and Environment (MEE) together with the Ministry of Commerce (MOFCOM) issued the new “Green development guidelines for overseas investment cooperation and construction projects.”  In this piece, Sarah Tang, Deputy Director of the Green BRI Center at IIGF analyses the new Guidelines and provides her recommendations for further greening of the overseas investment under the Belt and Road. 

China Third-Party Market Cooperation for Infrastructure Projects: Financing Mechanism Handbook

Over the past years, China has become one of the most important sources of infrastructure funding in the developing world through its Belt and Road Initiative (BRI). Yet, the infrastructure financing gap is still significant and far from closing, especially in the aftermath of the COVID-19 pandemic. Therefore, it is paramount to deepen international cooperation between relevant stakeholders, including private investors, in infrastructure financing. In this context, IIGF Green BRI Center was commissioned by the British Embassy Beijing to prepare a handbook for Chinese companies to apply project finance in overseas infrastructure projects. It particularly aims to facilitate the cooperation between Chinese companies, Chinese and international financial institutions in third markets.