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Article

9 Mar 2021

Author:
Shi Yi, China Dialogue

Kenyan coal project shows why Chinese investors need to take environmental risks seriously

"Kenyan coal project shows why Chinese investors need to take environmental risks seriously", 9 March 2021

[...] Three Chinese state-owned enterprises had got behind the project in 2015. Local communities and environmental activists then launched a petition, demonstrated and filed a lawsuit against it before a court ruling suspended the project’s permit in 2019. Major financiers, notably the Industrial and Commercial Bank of China (ICBC), pulled out. And finally, in November 2020, the Kenyan government cancelled the project.

For Chinese companies looking to expand their presence along the Belt and Road, the failed project is a lesson in the risks of investing in environmentally damaging projects that lack community support. Once again, it’s prompted calls for China to adopt stronger regulations to govern overseas investments. [...]

To keep Lamu coal-free, a few environmentalists and civil groups took the National Environment Management Authority and Amu Power to the National Environmental Tribunal in 2016. Three years later, in June 2019, they won the case. The judgment affirmed that the environmental and social impact assessment (ESIA) failed to adequately consider pollution from the plant or its negative impacts on people, flora and marine life. The judgement also found that public participation had been insufficient. The plant would need a new ESIA before its construction could resume.  [...]

Part of the following timelines

China's commitment to phase out overseas coal investment

Kenya: Lamu Coal Power Plant