Energy and green economy were two of the major focal points last week in agreements signed between Beijing and other countries that are members to the Shanghai Cooperation Organization (SCO), including an open-ended commitment for China to “jointly develop” 10 gigawatts (GW) of wind and 10 GW of solar overseas over the next five years.
On the outside, it certainly sounds doable. China has developed over 900 GW of wind and solar domestically over the past five years. And overseas investments have grown as well, particularly in Belt and Road countries.
But in reality, overseas wind and solar investment still faces a lot of hurdles. In our research on Chinese enterprises engaging in overseas energy investments, we regularly meet investors who are keen on wind and solar projects but daunted by the structural barriers, including a lack of appropriate financing mechanisms and insurance.
In 2025, Chinese state-owned enterprises invested in around 8 GW of wind and solar power plants combined overseas, a figure that includes a 2 GW wind project in Azerbaijan that thus far is only outlined in a memorandum of understanding (MOU). In 2024, only 6 GW of wind and solar was announced, including 1.4 GW in an MOU. In a research project that tracked investment up to June 30, 2024, we found that China’s state-owned enterprises had announced investments in a total capacity of 40 GW of wind and solar power plants, a little over half of which is currently in operation or under construction, with some projects already canceled, shelved, or still in pre-construction.
Even as Chinese investments in overseas coal projects have decreased since 2021, renewable energy investment has not significantly risen. COVID-19’s direct impact was a clear factor for several years: China wasn’t going out much at all. So the limited investment in overseas wind and solar projects fit a cross-sectoral trend. But our research indicates that structural challenges and strong signal from Beijing will be necessary to start a “going out” trend in wind and solar investment.
While it is quite an open-ended commitment, the SCO statement made an explicit focus on green energy infrastructure, and compared to previous cooperation initiatives, it is more target-oriented. This suggests that there’s a growing signal at least for Chinese investors to grow renewable energy investment.
So what will that take?
In our research, we found that at the implementation level, overseas wind and solar investment is a major headache for Chinese investors, and the system is not as well-honed for these types of projects as it once was for coal and remains for other fossil fuels.
Chinese investors see limited and ineffective financing structures or tools to achieve investment in wind and solar overseas, limited and inflexible insurance guarantees for these types of projects, a lengthy approval process, and a fragmented regulatory system, coupled with misaligned international technical standards, which inhibits projects.
In short, Chinese investors see only a few, relatively uninsured pathways to invest in wind and solar projects overseas. And there is disclosure pressure or peer pressure to know how the wind and solar projects that have succeeded were done.
There are already some innovative financing models that have emerged to suit the needs of wind and solar projects overseas. Scaling them up will require policy support from the government, with a short-term focus on improving project implementation and insurance’s capacity to cover risk.