Stories of High-Quality Development | Financial integration lights up households in the 'Rainbow Nation'

Narrator: Shen Hua, General Manager, Trade Finance Department, Bank of China Johannesburg Branch

South Africa has long struggled with power shortages. To address the power crisis, the South African government has been actively developing renewable energy in recent years. In 2024, following a call for tenders from the South African government, PowerChina signed a contract for the Oasis 1 battery energy storage systems projects. Once the projects are completed, they will store 1,000 MWh of electricity, enough to meet the daily power needs of 100,000 households. These projects will light up households across the "Rainbow Nation."

The owner of the Oasis 1 battery energy storage systems projects is Electricite De France (EDF), a foreign-invested enterprise that holds a significant position in South Africa's energy market. For a long time, it was nearly impossible for Chinese companies to participate in energy projects like this in South Africa.

The reason is quite practical: on the one hand, European and American companies have deep roots in South Africa's energy sector; on the other hand, some international financial institutions lack understanding of Chinese enterprises' business models and financial structures. This is especially true for light-asset projects that focus on equipment and installation, where it's difficult to obtain credit support from local banks.

But this time, the situation has changed. PowerChina's selection as contractor depended on financial backing from the Bank of China. The bank acts as a credit guarantor, issuing guarantees that comply with South African market practices to secure PowerChina's contract fulfillment. This helps companies overcome entry barriers by ensuring contractors can receive advance payments and proceed with construction while reducing risks for project owners and enhancing the professional image of Chinese companies in international projects.

South Africa was the first African country to sign a Belt and Road cooperation document with China. Green development is a defining characteristic of the BRI, and green development and energy cooperation are key areas for the Bank of China's support in South Africa.

In 2022, the Bank of China's Johannesburg branch issued Africa's first Chinese bank-led green bond, raising $300 million. In 2024, the bank provided 30 million yuan ($4.1 million) in financing to China State Construction Engineering Corporation South Africa to support the expansion of expressways in Durban. In July, the Bank of China reached an agreement with BAIC's South African plant to support its new energy vehicle project.

Financial integration provides crucial support for the joint construction of the Belt and Road Initiative. Each fund serves as a booster for turning China-South Africa BRI cooperation from vision into reality, contributing to the synergy between the Belt and Road Initiative and South Africa's Economic Reconstruction and Recovery Plan.