Focus on Arts and Ecology

The ‘Trump corollary’ to the Monroe doctrine has taken US foreign policy back to the 1800s and risks defeat in the transition minerals race. 

By Sam Meadows, August 27, 2026

In early August, Donald Trump’s state department posted a five-minute film on social media. The clip details what the US foreign policy office calls one of the “boldest diplomatic statements in American history” – the 1823 Monroe doctrine.

The Monroe doctrine was a response to the threat of recolonisation of the Americas by European powers. The then-youthful United States, keen to see off this threat, declared the western hemisphere would be free of imperial conquest. This doctrine later developed into a broad statement that the US was “practically sovereign” in the region.

The era of European empires has waned. But, as the state department’s video makes clear, President Trump’s administration is unabashed about declaring itself dominant over its Latin neighbours. What is at the heart of this resurgence of 19th century foreign policy?

China has been quietly gaining ground in Latin America for decades, establishing itself as the region’s second-largest trading partner and top creditor. Chinese companies are behind lithium mines in Chile and Argentina and megaports in Peru, while China’s government is pushing a transcontinental railway to link it all together.

Both China and the US aim to be energy powerhouses, and the resulting clash over Latin America indicates two different approaches. Chinese companies have invested in lithium and other minerals central to the energy transition. Meanwhile, the Trump administration’s ousting of Venezuela’s President Maduro in January was nakedly linked to the country’s bountiful oil reserves.

The kidnapping of a sitting head of state may be seen as a warning to Latin America: the US is still the sovereign here. But is that still true? And could US strong-arming push Latin America away, and into the arms of Chinese investors?

The ‘Donroe’ doctrine

The White House national security strategy, published in November 2025, establishes a desire for a western hemisphere “free of hostile foreign incursion or ownership of key assets”. Unveiling the document last year, Trump told the world’s press that “American dominance in the western hemisphere will never be questioned again.” He cited the Monroe doctrine directly, attaching a “Trump corollary” for the 21st century – a so-called “Donroe“ doctrine.

“The [Monroe] doctrine has found its latest champion in Donald Trump,” says the US ambassador to Panama Kevin Marino Cabrera, who narrates the state department video. It is fitting that he was chosen to deliver Trump’s message. Ever since Panama achieved independence from Colombia in 1903, the US has retained a strong hold over its politics. Until 1999, it even retained sovereignty over a buffer zone on either side of the Panama canal.

In 1997, the Hong Kong company CK Hutchison won contracts to manage the ports at either end of the nautical thoroughfare. This year, those contracts became the centre of a political firestorm after Panama’s supreme court ruled them unconstitutional. Trump had previously claimed China was “operating” the canal.

Such pressure has been building across the continent. In June, Chile scrapped plans to link its coast to Shanghai via an undersea cable to enable data traffic, after the US raised concerns that the cables could also have a military function.

In Argentina, a dispute broke out this August after the US embassy in Buenos Aires threatened to revoke US visas for executives of an Argentine electricity company, after they brokered a deal with the Chinese company Huawei. This was despite President Javier Milei being one of Trump’s strongest Latin American cheerleaders and ideologically aligned with the White House.

Trump’s aggressive foreign policy has been a step change to that of his recent predecessors. Margaret Myers, managing director of John Hopkins University’s Institute for America, China and the Future of Global Affairs, says the narrative during President Obama’s US administration was that anything which benefitted Latin America was good for the US.

This softer approach, which enabled Chinese investment in South and Central America to proliferate, has been consigned to history as far as Trump is concerned. “You don’t hear that narrative anymore,” Myers says. “Now the narrative is that China will take advantage and if you engage too much there will be negative implications.”

The Chinese offer

China has reacted angrily to the stream of diplomatic rapprochements and threats coming from the Trump White House. In August, China’s ambassador to Chile, Niu Qingbao, accused the US of “coercive diplomacy” and “showing no regard for sovereignty”.

Chinese government officials have also argued that China’s overseas development model is based on cooperation and mutual benefit, and on strengthening partnerships between countries of the Global South. The word “cooperation” is used 174 times in its most recent Latin America policy document.

The country’s companies – many linked to, if not backed by, the state – have provided financing for a range of important infrastructure, the most notable of which is the port of Chancay, 80 km north of the Peruvian capital Lima. The Chinese shipping conglomerate COSCO owns a 60% stake.

Alice Hill, a former White House energy adviser and senior fellow at the Council on Foreign Relations, says China’s success has been based on acting as a reliable partner, as a contrast to Trump: “It’s a little like a marriage. If your trusted partner has cheated on you, it’s hard to overcome. We [the US] and our word hasn’t proven reliable. We cut off aid and we’ve disparaged our allies.”

How is the region responding?

As the international relations analyst Fernanda Magnotta pointed out in a recent post for Americas Quarterly, such aggressive use of US pressure makes alternative partners more appealing, not less. It also underlines the idea that taking sides is futile: “By trying to make Latin America choose, Washington will teach its governments why they should never have to.”

Brazil and the US have come to diplomatic loggerheads as the former approaches its election in October. Earlier this month, the visa of Brazil’s ambassador to Washington was revoked.

Meanwhile, the case of Argentina suggests that countries are driven more by necessity than ideological purity when it comes to taking geopolitical sides. As much as Milei might like to strike up an unbreakable friendship with the US president, economic realities in his country have led him to extend a multimillion-dollar currency swap with China.

New diplomatic ties with China are forming all the time. Just last week, the Ecuadorean president Daniel Noboa met his Chinese counterpart Xi Jinping in Beijing as part of a state visit.

‘The transition is being made in China’

An important factor is that only China currently has the technology and expertise when it comes to energy transition technologies. And as major producers of the critical minerals that underpin those technologies, from lithium and copper to nickel and cobalt, Latin American countries have little choice but to export to China. In 2025, Chile sold more than half of its copper to China and 70% of its lithium.

Gustavo Pinheiro, an analyst at the energy think-tank E3G, says this transition is a “once in a lifetime opportunity” for Latin American development. “The transition is being made in China; it’s being made in technology,” he adds. The US, meanwhile, has “doubled down” on fossil fuels, according to Hill.

And it is not just at the government level that US aggression is pushing the region away. Polling published in July by the Pew Research Center suggests that views of China are now more positive in the region than views of the US; people are more likely to say that the US interferes in other countries’ affairs.

Pinheiro points out that there is a long history of US aggression, which is well understood in the region: “The US has 200 years of a terrible track record as an ally. They have proven again and again how unreliable [they are].”

If Trump believes he can bully his allies into submission, it appears that in Latin America he may be mistaken.

Hailed as the path to development, exploitation of the Patagonian deposit is not making Argentinians richer, writes economist Marco Kofman. 

By Marco Kofman, September 1, 2026

In global economic debates and across broad sections of Argentina, there is a recurring and seductive narrative: a country blessed with such immense natural resources has a straightforward path to development.

With that illusion, my country plunged headlong into the wells of Vaca Muerta, the gigantic geological formation in Patagonia that holds immense reserves of unconventional gas and oil.

There, in the depths of an oil well, we placed our hopes and longings for rebirth – for an Argentina that would finally be able to reverse the neglect suffered by the vast majority of its people.

However, as the drills dig deeper and the oil and gas gush forth at unprecedented rates, that dream is shrouded in ever-deepening darkness.

This year, production of hydrocarbons in Neuquén province, where Vaca Muerta is located, hit a new record. It now accounts for the majority of oil and gas extracted in Argentina, and is reversing past energy deficits.

But whilst ships laden with crude oil set sail, the economy faces crisis. According to the National Institute of Statistics and Censuses’ wage reports, real wages have fallen by 40% for public sector workers and 25% for those in the private sector since 2015. Education, health and infrastructure funding has fallen by as much as 90%, with profound consequences for public services.

The loss of income and the deterioration in Argentinians’ living conditions have led to a drastic increase in families unable to keep up with their debts in recent months.

The inflow of dollars from the country’s favourable trade balance has never been so substantial and yet the central bank still faces serious difficulties in rebuilding its reserves.

There is an obvious question: why has such a flow of oil wealth failed to stabilise the economy and lead to prosperity?

The mirage of foreign exchange

A key part of the problem is that, as dollars have flown into Argentina in huge numbers, they have also been taken away.

Argentina’s dominant economic players, including its oil and gas companies, have tended to dollarise their profits. This is being driven by several factors, such as local exchange rate volatility, the yield differentials offered by international interest rates, and corporate strategies aimed at diversification and the repatriation of capital to core markets. 

The problem is exacerbated by the libertarian principles of President Javier Milei. His Incentive Regime for Large Investments (RIGI) seeks to attract capital by granting massive tax, customs and foreign exchange benefits that remain valid for three decades. Investors are allowed to retain the foreign currency earned from their exports, rather than bringing it into the country.

Milei’s government also lifted most of the complex web of currency restrictions that have been a long-running feature of the Argentine economy. The government has relied heavily on external borrowing to support its exchange rate policies and prevent a further devaluation. According to data from the private consulting firm 1816, gross foreign currency debt (excluding the public sector) has increased by USD 24.8 billion since Milei took office.

Vaca Muerta is currently bringing in the dollars needed to meet demand from Argentina’s wealthiest sectors, keeping those businesses aligned with the government’s programme. The problem with debt is that it needs to be repaid, and this will mean yet more dollars leaving the country.

The thick “black gold” is the lifeblood coursing through the veins of this political project. It is a grand pact amongst the ruling classes, where dollars accumulate in the accounts of the few, whilst poverty and precarious living conditions come hot on its heels for the majority.

The underlying aim is to transform Argentina from a complex, industrialised economy into an enclave economy reliant on resource extraction. The wealth generated then arrives in the hands of a small elite.

Rarely has our economy experienced such rapid development as that which took place in Vaca Muerta. However, this golden age of hydrocarbons coincided with one of the worst periods in the country’s economic history.

These two contradictory processes should not be understood as isolated phenomena: Vaca Muerta is not an oasis within an economy in crisis. On the contrary, it is a central component of the current system of domination, of the economic and political alliance that envisions an Argentina for the few.

Marco Kofman

As heat overlaps with other intensifying climate events, scientists are uncovering how they compound each other – and how cities can adapt. 

By Joe Coroneo-Seaman, September 3, 2026

Europe’s recent record-breaking heatwaves are a prescient reminder of how dangerous heat can be. During one seven-day stretch in late June, more than 10,000 excess deaths were recorded in the region by the European Mortality Monitoring Network. This is a spike that scientists have so far only been able to attribute to higher temperatures.

But the health problems during these events are increasingly not due to heat alone.

In recent years, scientists have started to build a clearer picture of how extreme heat combines with other environmental hazards, such as cyclones, wildfires and ozone pollution. Their work suggests these compound events are becoming more common due to climate change and, in turn, carry greater health risks than each event would on its own.

Damage to infrastructure and disruption to everyday life from a hurricane undermines people’s ability to cope with heat, which itself can then hamper disaster recovery efforts. Wildfires destroy landscapes while the smoke they generate adds to the adverse health impacts of heat, across many kilometres.

“Heat is insidious,” says Kurt Shickman, senior fellow at the World Resources Institute’s Ross Center for Sustainable Cities.

“It reduces people’s ability to weather other disasters.”

Hurricanes and heat: Resilience as a solution

In August 2021, Hurricane Ida made landfall in the United States. The category four tropical cyclone brought fast winds, intense rain and storm surges to the states of Louisiana and Mississippi, as well as painful memories of the devastation wrought by Hurricane Katrina 16 years before.

Six people died as a direct result of the Ida’s winds and floodwaters. But the cyclone caused more deaths – via an indirect, compound route.

Hurricane Ida produced the most extensive power outage in Louisiana’s history. The utilities company Entergy, which supplies electricity to the southern US states of Arkansas, Mississippi, Texas and Louisiana, reported that around 30,000 utility poles were downed. Such impacts left at least 1.2 million households across eight US states without electricity for hours, if not days. For some people in Louisiana, days stretched into weeks.

In those weeks a blistering heatwave arrived. Heat index temperatures, which combine air temperature and relative humidity to give a “feels like” value, surpassed 37.8C. With millions of homes lacking electricity and unable to run air conditioning, the heat proved more deadly than the initial cyclone. According to the official tally, 13 people died from “post-Ida heat exhaustion”.

Ida is one in a string of recent tropical hurricanes – Irma in 2017, Laura in 2020 and Beryl in 2024 – that have made landfall on the US gulf coast before causing heat-related deaths during the massive power outages that followed.

As well as taking down infrastructure directly, heat piles the pressure on city power grids: electricity demand for air conditioning shoots up, while cables overheat and carry less power. One analysis of the impact of compound weather events and heatwaves on power outages across the US observed that the combined stress often led to “cascading failures and prolonged recovery times”.

These problems are compounded by defoliation, caused by hurricane winds blowing leaves off trees or bringing them down entirely. The resulting loss of shade and evapotranspiration, by which trees naturally cool the surrounding air, has been shown to leave neighbourhoods with higher exposure to dangerous heat. A 2023 study estimated that after hurricane Laura, residents of Cameron, Louisiana experienced heat index temperatures above 30C for 24 additional hours compared to a simulated “normal foliage” scenario. This effect was found to be particularly strong at night.

Disaster relief workers are especially vulnerable to the cyclone-heatwave cocktail: hours of physical work outside in restrictive protective gear, with little rest or shade. Conditions for rescue workers after hurricane Beryl were found to have frequently exceeded workplace heat safety thresholds.

Patricia Fabian, a heat expert at Boston University in the US, says post-cyclone power cuts put people at risk of more than just heat stress. Food and water supplies become erratic; medication that needs to stay refrigerated soon becomes unusable; during days of stifling heat, people are more likely to go swimming to cool down in lakes and rivers, which are more likely to be contaminated with sewage because heavy rain has overwhelmed the stormwater drains. “That results in spikes in gastrointestinal disease,” she explains.

Combined cyclone-heatwaves have been relatively rare in the past, but they are expected to occur more as the climate warms. In 2019, a study published by Nature Climate Change observed that the arrival of a major tropical cyclone, followed within 30 days by a heat index temperature above 40C, has historically happened three times every 30 years.

If global heatwaves become more frequent and intense in line with projections, this could rise to seven times every 30 years at 1.5C of average global warming. That grows to 11 times at 2C. If global warming reaches an average of 4C, the study says such events “could occur at least annually”.

Keeping the power on could be vital for saving lives when this happens.

“Better maintenance” of electrical infrastructure can make cities less vulnerable to outages during hurricanes, explains Ning Lin, a civil and environmental engineering expert at Princeton University in the US. Trees and branches falling onto power lines cause the most problems. Therefore, city governments and grid operators can lower this risk by burying cables underground, regularly checking for old or damaged poles and trimming trees, she says.

Some city residents are already bringing in their own heat solutions. The city of New Orleans in Louisiana was hit hard by both Katrina and Ida. So, as part of the Community Lighthouse Project, local community buildings are being equipped with solar panels and batteries to enable them to assist local people if power networks go down.

For Shickman, the high chance of power cuts during a compound heat event makes the case for rolling out passive cooling measures (creating shade, planting street trees, using heat-reflective materials for buildings) even stronger. He wants passive cooling features to become a key part of what makes a building safe legally, via health and safety codes. This would place them on a par with fire extinguishers and smoke alarms.

“It’s critically important that it’s the focus – it works regardless of whether there are electrical inputs,” Shickman points out.

“We need to keep our communities and our buildings as cool and as safe as possible. [Even with passive cooling] they’re not going to be cool, but they are going to be safer than a building that has been absorbing heat the whole time.”

Heat and wildfires: Warning signals

Extreme heat and wildfires are another dangerous pairing. When combined with unusually long periods of low rainfall or drought, hot weather has contributed significantly to increased fire activity in recent years.

On their own, wildfires can be deadly. In 2025, a series of catastrophic blazes across the US, Europe and South Korea resulted in over 300,000 evacuations and over 90 deaths. But there is also evidence of “synergistic” negative effects on health from heat and smoke.

Breathing in fine particulate matter (that with a diameter of less than 2.5 micrometres), is a major secondary cause of wildfire-linked health impacts. Both heat and smoke inhalation contribute to cardiovascular and respiratory problems. Experiencing both at once raises the chance of complications, and wildfire smoke plumes can choke cities hundreds of miles away.

In 2024, researchers in the US published an analysis of satellite, environmental and public health data collected in California between 2006 and 2019. They found that in areas exposed to extreme heat (when the heat index was higher than 85% of historical summer days) and dangerous levels of wildfire smoke on the same day, hospitalisations for cardiorespiratory disease were higher than would be expected from the sum of the risk of both hazards separately.

The effect was more pronounced in certain neighbourhoods, says study author Miriam Marlier, who works on the overlap of environmental change and public health at UCLA Fielding School of Public Health in the US. The at-risk neighbourhoods had factors that are all too familiar to those who study urban heat: “[Lower levels of] local tree canopy coverage, local income and health insurance coverage were related to higher synergistic effects,” she says.

Upgrading buildings to better resist heat can help here, but key to saving lives is warning people about incoming risks.

In the US, two separate government agencies are responsible for sending out warnings on heatwaves and air pollution. Marlier observes that public alerts issued ahead of heatwaves and air pollution from wildfire smoke are often “at odds with each other”. She explains: “If it’s hot, you’re told to open your windows to be outside to try and cool down. What are you told when it’s smoky? You’re told to close everything up, stay inside, try to keep inside as clean as possible to protect your health. What are you supposed to do when it’s hot and smoky?”

Marlier and her colleagues propose issuing joint alerts for when both heat and wildfire smoke are forecast, with a lower threshold to compensate for the greater risk to people’s health.

Shickman agrees: “Access to early warning systems is absolutely critical.”

These warnings should focus not on the physical attributes of the weather, he argues, but on potential health outcomes: “The way we assess the danger of a hurricane has nothing to do with what it means for humans. We don’t talk about storm surge of hurricanes, we talk about wind speed [although the former does more damage]. It’s even worse with heat. It’s just temperature, but that’s not really an indication of what the danger is for people.”

He points to the city of Seville in Spain, which has piloted a new approach to heatwave warnings along these lines. In 2022, the city council worked with researchers to examine decades of local weather data to identify which conditions – rather than simply which temperatures – were linked with the most heat deaths. This was used to recalibrate the public alert system, which by the end of summer had identified two potentially dangerous heatwaves that were not flagged by Spain’s weather agency AEMET.

Last year, a non-profit healthcare provider in New York experimented with using an AI agent to give personalised heat warnings. “Rachel” contacted 17,000 customers living in high-heat-risk neighbourhoods by text chat or phone call to offer heat safety advice, such as asking if they had access to air conditioning and cool water. The company reported 47% fewer in-patient admissions compared to a control group.

Hidden cascades

As Europe is learning, extreme events linked to climate change are making overlapping risks more common. But Shickman warns there is more insidious compounding going on that must not be overlooked: persistent, chronic heat.

“There’s a hidden cascade that happens when heat hits a city. It’s the grinding intensity of the heat, day and night, that causes knock-on effects that aren’t always attributed to heat but are really related to heat.

“If someone is having their educational potential stunted because of heat, that compounds over their whole life. Is it a big splashy heatwave along with a hurricane? No. But it’s a disaster nonetheless.”

As the world continues to overheat, more people will feel negative health effects of compound disasters. This points to the growing need for city governments and companies to recognise heat as a serious health threat worth dedicating resources to. While low-tech measures to adapt cities to extreme heat are readily available, says Shickman, the real challenge is getting investment. “It’s the guys in the bank and the boardroom. That’s where the innovation and mindset change needs to happen.”

Kenya’s small-scale solar market shows how local capital can be just as important as big China-funded renewables projects, writes Man Kit Chung. 

By Man Kit Chung, August 26, 2026

Last year China was once again the world’s top manufacturer of solar power equipment. Exports stood at USD 29 billion with sales to the Global South growing particularly fast.

China can supply huge quantities of affordable equipment for community energy across Asia, Latin America and Africa. However, research institutions and NGOs have pointed out that the country is rarely involved in financing such projects.

Prior to 2020, almost all of China’s involvement in overseas renewables was in big, grid-connected projects. Global South communities in need of off-grid distributed solutions, particularly in remote rural areas, were outside the scope.

But from 2021, China’s overseas cooperation started to include low-cost “small and beautiful” projects designed to have rapid and direct benefits for communities. The country’s Africa Solar Belt Program, launched in 2023, aimed to provide basic electricity access to 50,000 poor households over three years, for instance. However, only CNY 100 million (about USD 14 million) of public funds were committed. This is orders of magnitude smaller than China’s utility-scale projects on the continent, which can cost hundreds of millions of dollars.

That stark contrast has led research institutions, think-tanks and NGOs to call for China to change the focus of its overseas financing. They say it should plug the Global South’s gap in funding for off-grid and microgrid solutions, particularly in rural areas.

However, that gap is about more than China’s financing preferences. Governments across the Global South could be doing far more to plug it. Particularly, they could mobilise local capital to address structural failings in their own capital markets and fund local renewable energy.

As we will see, China for its part could act as an “anchor investor”, buying up off-grid solar debts issued by local banks. It could also act as an “asset builder”, using its expertise in poverty relief to help Global South communities create assets and find innovative income streams to pay for local financing models.

Not just China prefers large renewables project

The preference for larger projects is a common problem in global development finance, not just in China.

Some multilateral financial institutions have long favoured large, grid-connected generation and transmission networks. For example, the African Development Bank’s (AfDB’s) Desert to Power initiative includes on- and off-grid generation across 11 countries, supplying power to 250 million people. The make-up of its loans clearly favours large projects.

The outside world wants China to rapidly shift direction but this overlooks how many Global South countries could do more to mobilise their own funds. Relying on external development financing reduces their ability to guide their own renewables development.

Some countries are unwilling to invest in “non-bankable” small, high-risk projects with unstable cash flow yet they still have plenty of “dormant capital”. This means investible funds sitting in low-yield assets (deposits, government bonds) rather than being invested in real-economy projects.

In 2023, for example, South Africa’s state-owned Public Investment Corporation had assets worth USD 137.5 billion but only 0.6% of that was energy investments. South Africa invests less than 20% of its portfolios in riskier assets, with the vast majority going instead to government securities, money market instruments and listed equities, according to AfDB statistics. While Nigeria’s pension fund assets were worth USD 14.7 billion at the end of 2024, but it only had 0.95% of those in infrastructure projects, against a strategic goal of 35%. Around 62.7% of pension assets were held in federal government securities, which are considered virtually risk-free.

In Africa as a whole, institutional investors, including pension funds, insurers and sovereign wealth funds, manage around USD 4 trillion in assets, but less than 2.7 % is allocated to infrastructure and productive sectors. Local capital markets are not doing all they can to fund community renewable energy projects. Waiting for China to do so would miss an opportunity.

In Kenya, successful local financing without China’s lead

Some Global South countries recognise that local money should be directed towards community renewables projects and have acted accordingly. Kenya has created a complete funding chain for community renewable energy systems, with no external development funding needed. The country now has Africa’s best-established off-grid solar market.

Broadly, Kenya’s model is a system of local finance allowing buyers of a solar power system to spread the cost.

Using Kenya’s local payment provider M-Pesa, several companies offer a pay-as-you-go model to solve the tricky problem of receiving payments from remote rural communities. 

A buyer pays a small deposit to get a solar system, which has an embedded smart meter connected to the internet. Then, via M-Pesa, they pay small daily or weekly instalments to use the system and buy more and more of it. If payments lapse, the system can be locked remotely via the meter. Once fully paid off, ownership is transferred and the system is permanently unlocked.

In this way, one large payment is turned into affordable smaller payments over time, as well as making breaches of the agreement less likely and cash flows more predictable. The purchaser doesn’t just benefit from the power supplied: ultimately, they own the equipment.

The firms selling the systems can package the agreements and sell them to banks, who then collect future payments. This “securitisation” gets the companies significant cash quickly, reducing liquidity risks and allowing for faster expansion.

The securities are stratified by credit rating agencies according to the risk of default. During this process, public funds and development finance institutions can be invited to buy the medium-risk tranches, leveraging private and commercial bank purchases for a stable and higher rate of return.

This catalytic role need not be confined to Western development financial institutions. Chinese policy banks could equally take up such medium-risk tranches, as explored in the final section below.

Because securitisation happens on domestic markets, there are no exchange rate risks arising from overseas transactions.

Emerging market securitisation trades are bundled into two or three tiers by risk. “Senior” securities have the lowest risk and are paid back first. The medium-risk “mezzanine” tier is paid back next. And finally the highest risk tier, “junior”.

If customers fail to make repayments, holders of the junior securities take the first losses. Once they are wiped out, the mezzanine tier takes losses. Only when that tier is wiped out too is the senior tier affected.

A securitisation only closes if every tier finds a buyer, and local commercial banks, which are bound by prudential rules, will only hold the senior ones. When development finance institutions buy the mezzanine tranche, accepting lower risk-adjusted returns as “catalytic capital”, they protect the senior tier and complete the capital structure. Their due diligence also reassures senior investors. Without them, the riskier tiers would go unsold and the deal would simply not happen.

Sun King is an example. The off-grid solar solutions company has so far only manufactured its products in China, but it recently opened a factory in Kenya and has plans for another in Nigeria. It says it has lent almost USD 1.3 billion to 10 million customers in Africa. After a USD 130 million securitisation in 2023, it worked with Citi to complete a similar USD 156 million deal in 2025. This saw local and overseas commercial banks buy up the senior tier. While development finance institutions – British International Investment, Dutch development bank FMO and Norway’s Norfund – supported the mezzanine tier.

East African companies, including those in Kenya, won at least 60% of all global investment in off-grid solar in 2012-2019, according to a World Bank report.

The Kenyan model does have its shortcomings. The cost of capital is high, it remains out of reach of the poorest populations, and the model struggles when, for example, extreme weather events cut off cash flows. But it proves one thing: when local capital, local regulators and local financial infrastructure work together, control over renewable energy development can be kept local. Foreign capital and technology can fill in gaps but they should not supplant local decision-making or the role of local financial intermediaries.

China’s role: From leading financing to supporting ecosystems

As a participant in South-South cooperation, China could consider changing how it approaches “non-bankable” community renewables projects in the Global South. Rather than providing aid and finance, it could work to support renewable energy ecosystems, led by local capital but supported by Chinese technology. This would avoid repeating, in community energy projects, the “lead contractor + loans” model that has historically dominated China’s overseas infrastructure and energy financing.

China could use its expertise in mobile payments and connected devices – also known as Internet of Things – to serve as the technical underpinning for pay-as-you-go solar platforms, thereby reducing the costs of smart locking and remote monitoring.

China could act as an “anchor investor”, working with its own policy banks, multilateral financial institutions and local institutions to buy up securitised off-grid solar debts issued by local banks. This would attract big investors such as pension funds and insurance companies to get involved and help improve and spread the Kenyan model.

China could also be an “asset builder”, drawing on its poverty-alleviation experience to help Global South communities generate assets and unconventional income streams. This in turn would sustain cash flow across the broader financing structure.

This aligns with the “financing for development” and “digital economy” priority areas of China’s own Global Development Initiative. It could help reduce direct administrative and financial input by China during overseas cooperation. It will also reduce overseas concerns about debt traps and technological lock-in. Finally, it offers a route to cooperation with the Global South that is more sustainable and more resilient to geopolitical change.

Man Kit Chung