In Jujuy Province, Argentina, South America’s biggest solar park is about to start producing electricity and it has been almost entirely funded and built by Chinese companies and technology.
At more than 4,000 meters above sea level, the Cauchari photovoltaic power station is the highest in the world, Reuters reports. It is so high that there is an onsite clinic where visitors can have their heart rate and blood pressure checked because of the risk of altitude sickness.
Cauchari is expected to start sending current to the grid in August and will initially produce up to 300 megawatts of electricity, enough to power 120,000 homes. There are also plans to expand it, to up to 500 megawatts, which is enough to power 260,000 homes.
But it has not been cheap. It has been financed by the Import-Export Bank of China which stumped up 85% of the $400 million required.
The Jujuy Province local government will have to pay back the loan with 3% interest over 15 years but there was a catch and that was that 80% of the material used in the solar farm’s construction must be from Chinese suppliers.
They include Huawei Technologies, the Chinese telecom giant that has come under criticism in the US and Europe for allegedly providing the regime in Beijing with a backdoor to spy on users and potentially cripple power networks.
Officials in Jujuy are unapologetic and say that they asked the Argentine government the US and Europe for help to build the project without success. Potential investors were scared off by the sheer size of the project and the fact that Jujuy province is the poorest in Argentina.
“China…was the one that more generously opened its doors to finance this project,” Carlos Oehler, president of Jujuy’s energy agency JEMSE, told Reuters.
With climate change a growing concern for all humanity, Argentina has set ambitious renewable energy targets and only China was prepared to step up with the cash.
China’s “Predatory” Lending Practices
Chinese investments have not gone unnoticed and have their critics. Mike Pompeo has criticised What he called Beijing’s “predatory” lending practices, which then leaves borrowers bound to Chinese companies.
“It is a way of expanding China’s growing global presence and dominant economic force, and it progressively reorients the world from the U.S. and European-centric view of the last fifty years,” said Tim Buckley, director for the U.S-based Institute for Energy Economics and Financial Analysis.
Pompeo went further and accused Beijing of meddling in the internal affairs of other countries.
“It is not okay to put technology systems in with latent capability to take information from citizens of Chile or any other country and transfer it back to President Xi’s government,” Pompeo said.
Whether you like it or not China has certainly got a foothold in the South American energy market. Just in Argentina, China has financed windfarms and hydroelectric dams and is in talks to build a nuclear power station with China’s own Hualong One reactor design.
Since 2000 China has spent $244 billion on energy projects and a quarter of that has been in South America. Globally China has been the biggest investor in clean energy projects for nine years in a row.
China is the undisputed world leader in solar technology. It is the world’s biggest manufacturer of solar panels. This has led to falling prices, which energy experts credit has the main reason why solar is being taken up so quickly around the world.
Once China gets a foothold in the energy sector then this often leads to spinoff contracts in other unrelated sectors for Chinese companies.
In Jujuy Province, the local administration signed a deal with the Chinese tech giant ZTE to provide it with fibreoptic telecommunications and surveillance cameras.
“(Cauchari) paved the way – a highway – for all other projects,” a person familiar with the situation told Reuters.