China’s green power in Angola: When clean energy comes with heavy debt

Clean energy can still come with high political and economic costs, even when framed as green cooperation

Originally published on Global Voices

This article was submitted as part of the Global Voices Climate Justice fellowship, which pairs journalists from Sinophone and Global Majority countries to investigate the effects of Chinese development projects abroad. Find more stories here.

When Angola’s Laúca hydropower dam began operating on the Kwanza River, it was widely presented as a milestone moment in Angola’s green energy grid development. Built by Chinese contractors and financed largely through Chinese loans, the project added more than 2,000 megawatts of capacity to the national grid and was framed as a key step toward cleaner energy.

In official state-sponsored Chinese narratives, projects like Laúca are frequently cited as examples of “green cooperation” in China–Africa relations. Government portals linked to the Belt and Road Initiative (BRI), China’s international development and infrastructure connectivity project, describe overseas hydropower as a low-carbon solution that supports both foreign development and international climate goals.

Yet in Angola, journalists and civil society groups are telling a more complicated story — one shaped not only by megawatts and emissions, but by debt, transparency, and questions around who ultimately benefits from large-scale infrastructure projects.

Angola and the origins of the “Angola Model”

In Chinese policy discourse, Angola occupies a special place. A 2017 report by the state-backed Chongyang Institute for Financial Studies at Renmin University of China describes Angola as the first large-scale testing ground for what later became known as the “Angola Model.” This refers to a consolidated system in which Chinese loans for infrastructure construction are repaid through resource exports, often referred to internationally as resource-for-infrastructure (RFI).

According to the report, this model emerged in the early 2000s, when Angola — which had recently emerged from civil war and was heavily indebted — faced strict loan conditions from the International Monetary Fund and Paris Club creditors, including austerity measures and privatization requirements. Chinese official development finance was presented as an alternative, offering longer maturities and grace periods without governance-related strings attached.

The report framed the model as mutually beneficial and economically stabilizing. Importantly, it was written during a period of relatively high oil prices, which benefited Angola as the largest oil producer in Southern Africa, thereby masking Angola’s full debt stress.

From the “Angola Model” to “Green Finance”

In recent years, Chinese state media have sought to reframe overseas infrastructure finance in terms of green development.

A March 2024 feature in China Pictorial, a state-linked media outlet, which was released during one of China’s most important political events, the National People’s Congress meeting, highlighted China’s green finance ambitions, describing how:

中国与共建国家不断深化绿色金融合作，持续推动对外投资绿色化进程，对外投资合作项目可持续发展水平不断提升。

China and partner countries have continued to deepen cooperation on green finance, steadily promoting the greening of overseas investment and improving the sustainability of outbound projects. 

The article emphasized the use of green bonds, green loans, green development funds, and specialized green finance instruments to support Belt and Road projects abroad.

The same report explicitly cited Angola’s Caculo Cabaça hydropower project, described as Africa’s largest hydropower project, as an example of Chinese financial institutions’ participation in overseas green energy development.

平安银行通过上海自贸区自由贸易账户参与了非洲最大的水电站项目——安哥拉凯凯水电站项目融资，首次与主权国家开展信贷服务，为项目的安全建设提供有力保障。

Through its Shanghai Free Trade Zone account, Ping An Bank took part in financing Africa’s largest hydropower project — the Caculo Cabaça hydropower project in Angola — representing the bank’s first instance of extending credit services to a sovereign state and providing financial backing for the project’s safe construction.

In this framing, large hydropower projects are positioned not only as development infrastructure but also as climate-aligned investments supporting global energy transition goals.

Angola’s debt: Then and now

Angola is today one of China’s largest borrowers in Africa. The Chinese government and its state media have proudly touted this fact for years. Data compiled by the Global Development Policy Center at Boston University show that the country has received more than USD 40 billion in Chinese loans, much of it tied to oil-backed repayment arrangements.

While Chinese policy researchers have framed resource-backed lending as a stabilizing tool during Angola’s post-war reconstruction, many subsequent reports by international media and independent researchers have highlighted how heavy reliance on oil-backed debt has left the country exposed during downturns.

A November 2025 report by Reuters noted that Angola is “saddled with high external debt to various creditors, including oil-backed loans from China,” and has increasingly turned to complicated financing arrangements as access to conventional borrowing narrows. The same report also warned that Angola currently has no financing program with the International Monetary Fund, underscoring the limited policy space available when oil revenues fall.

When prices fell after 2014, debt servicing absorbed a growing share of public revenue, narrowing fiscal space for health, education, and climate adaptation.

Debt sustainability assessments by the International Monetary Fund and the African Development Bank continue to flag Angola’s vulnerability, noting that high repayment obligations constrain public investment.

Hydropower at scale, transparency in short supply

Laúca, along with the even larger Caculo Cabaça dam upstream, reshaped Angola’s energy ecosystem. Chinese state media and company profiles emphasize construction speed, installed capacity, and engineering scale when presenting these projects.

By contrast, local investigative reporting, such as a study by Maka Angola, has highlighted long-standing challenges in transparency around Chinese credit and infrastructure deals in Angola. In one article examining delayed credit tranches from the China Development Bank, Maka Angola described opaque terms and contracting issues, noting discrepancies between loan intentions and actual fiscal outcomes, and quoting Angolan Finance Ministry sources characterizing the arrangement as one that left the country economically strained.

This opacity makes it difficult for the public to assess long-term fiscal risks — particularly in a country already under debt pressure.

Power generation without universal access

While hydropower has expanded Angola’s generation capacity, access to the resources remains uneven.

Large dams feed electricity into national grids, but do little on their own to address the structural gaps that prevent power from reaching households and small businesses. The result is a familiar contradiction: landmark infrastructure projects coexist with persistent energy poverty.

Angolan investigative outlets have repeatedly highlighted governance, access, and transparency issues in major infrastructure finance. Angolan watchdog media like Maka Angola have continued to publish investigations into elite corruption and economic decision-making, including issues tied to high-level deals that lack transparency. It also maintains a dedicated feed of China-related investigations, documenting credit arrangements and deal terms that are often opaque, while other reporting on the site examines economic decision-making and elite capture in high-level contracts.

Green narratives and fiscal constraints

In recent years, Chinese policy documents have increasingly emphasized “green development” and a “Green Belt and Road,” with hydropower positioned as a climate-friendly alternative to fossil fuels, according to the International Institute of Green Finance, Central University of Finance and Economics.

From a carbon perspective, hydropower supports emissions reduction. From a fiscal perspective, however, Angola’s situation is more constrained. Economists interviewed by Expansão argue that repayment obligations linked to large infrastructure loans — many of them Chinese-financed — limit the government’s ability to invest in decentralized renewables, grid upgrades, and climate resilience.

In this context, the “green” label appears incomplete: environmental gains coexist with economic trade-offs.

More than megawatts

International media increasingly frame Angola as a site of strategic competition. Reporting on the EU–AU summit held in Luanda, Deutsche Welle’s Chinese-language service described how European leaders openly portrayed China’s infrastructure financing — including energy projects — as a challenge to be countered through the EU’s “Global Gateway” initiative.

At the same summit, Angolan President João Lourenço stressed that Angola does not want to depend on a single partner and remains open to cooperation with multiple actors — a reflection of the country’s attempt to navigate between competing external powers and their interests.

Laúca and Caculo Cabaça will likely operate for decades. They will generate electricity and appear in official statistics as renewable success stories.

But sustainability is not measured only in megawatts or emissions avoided. It also depends on transparency, debt sustainability, and whether projects expand — or constrain — a country’s development goals.

Angola’s experience suggests that clean energy can still come with high political and economic costs, even when framed as green cooperation. At the same time, China’s growing footprint in overseas finance has sparked alarm among analysts who warn that countries such as Angola risk sliding deeper into debt dependency. Under the banner of green finance, Chinese lending is increasingly presented as a superior alternative to Western aid — a message that features prominently in Chinese state media and has found a receptive audience in parts of Africa, both at the governmental level and among the public.