Chinese Energy Financing in the Western Balkans: From Coal Lender of Last Resort to 'Green Belt and Road'?
Published 28 July 2023
Executive summary
Chinese financial institutions have in recent years become a major source of financing for energy infrastructure in the Western Balkans. This financing, delivered under the banner of President Xi Jinping’s Belt and Road Initiative, has predominantly supported fossil fuel projects. The six jurisdictions of the Western Balkans are Contracting Parties of the Energy Community, through which they have assumed legal obligations in transposed elements of the European Union acquis communautaire. This article analyses Western Balkan coal projects financed by Chinese institutions from the perspective of Energy Community law and identifies multiple breaches of the transposed acquis. It also demonstrates that both the legality and the economic viability of such coal projects will be further imperiled by current and ongoing developments in EU and Energy Community law that respond to the climate crisis, but also by changing Chinese policy on outbound financing for coal and efforts to ‘green’ the Belt and Road. The article concludes that Contracting Parties in the Western Balkans should recognize these growing risks to financing coal projects and should focus on developing renewable energy resources, consistent with their Energy Community commitments.