Paving the Way towards Green Development: Impact of the Belt and Road Initiative on Electrification in Participating Countries

Abstract

Electrification is crucial for achieving global net zero emissions and reducing energy poverty, particularly in developing countries involved in the Belt and Road Initiative (BRI). This study uses the difference-in-differences method to examine the BRI's impact on electrification levels in 118 countries from 2009 to 2020. Its findings indicate that the BRI increased electrification in BRI countries by approximately 1 percent compared with non-BRI countries. This increase was driven primarily by enhanced trade and investments, which facilitated imports of power equipment and supported China-backed power-plant projects. The BRI's impact was more pronounced in Maritime Silk Road countries, high-income nations, and those with favorable business environments. Although the BRI promoted both renewable and nonrenewable power equipment imports, it primarily favored nonrenewable infrastructure investments. Given China's expertise in clean energy, there remains untapped potential for the BRI to prioritize renewable energy integration, fostering a sustainable and low-carbon future.