Via Inside Climate News, at look at how China is deploying low-carbon investments through its $1.3 trillion Belt and Road Initiative. But many of these projects come with risks of their own. Case in point: Two hydroelectric dams in Argentina could flood cultural heritage sites and harm one of the world’s largest glacial icefields.

Deep in Southern Patagonia, Mariana Martinez wades barefoot into the turquoise waters of a glacial lake. In the rugged mountains surrounding her, the sun streams into forest-draped valleys and intense Patagonian winds spray water into the air. 

This is a landscape of extremes, a region at the southern tip of South America where nature, in its rawest form, still reigns supreme. To Martinez, the idea of bending the terrain to humans’ will seems a folly.

Yet for more than a decade, Argentine and Chinese leaders have been attempting just that.

Martinez is part of a coalition of environmentalists, Indigenous communities and scientists fighting the construction of two hydroelectric dams on the Santa Cruz River, which flows from the lake where she stands. Among their fears is the possibility that the dams’ reservoirs will flood cultural heritage sites and impact the world’s largest continental glacial icefield after Antarctica. 

Experts—including geologists, glaciologists, Indigenous leaders and biologists—warned of the project’s risks. Others question the logic of damming one of Argentina’s last free-flowing rivers, which originates in a United Nations World Heritage site, when alternative energy solutions exist.

A multi-billion dollar deal between China and Argentina to build the dams was inked in 2014 anyway, with construction beginning the following year without adequate studies or community consultations, according to Argentine court rulings. As a result, construction keeps stalling. The dams, meant to be operational years ago, are largely unfinished and local residents have called them an environmental and human rights catastrophe.

The Santa Cruz dams are part of China’s massive $1.3 trillion overseas investment initiative, known as the “Going Out” policy in the early 2000s and later rebranded as the “Belt and Road Initiative.” The program has funded and built ports, smart cities, railways, power plants and other infrastructure in countries around the world, securing lucrative contracts for Chinese firms while deepening Beijing’s sway across the Global South. For countries in Latin America, Asia and Africa, the Belt and Road has unlocked funding for energy and infrastructure projects once out of their reach through traditional development assistance. 

Some U.S. officials and human rights experts call the program a strategy to expand Beijing’s geopolitical influence by purchasing allegiance or trapping partner countries in debt they cannot repay. But leading researchers point to a more complex set of motivations and see China asserting itself as a superpower while offering an alternative to Western financial institutions. Still, they say, the weak standards of early Belt and Road projects caused developing countries to accumulate unsustainable debt, while instances of corruption, rights violations and poor construction have damaged the program’s reputation.

The arrangement with Argentina was typical for China’s early forays into development finance—where speed often outweighed due diligence, researchers say. For Beijing, there was more than one reason to get money out the door as quickly as possible: China was sitting on a glut of foreign reserves, had a slowing economy at home and had hydroelectric companies looking for work. The billions lent to Argentina for construction would largely go to one of those companies, a win-win for Beijing. 

The Chinese embassy in Washington, D.C., referred questions to its embassy in Argentina. That embassy did not respond to requests for comment. But Chinese officials have said they’re bringing badly needed infrastructure to poor countries through South-South partnerships, not patronage.

In practice, that means Belt and Road projects typically lack the environmental and human rights safeguards that most development banks and Western lenders now require. Today, scores of these projects have harmed local communities and sensitive ecosystems or threaten to do so once built.

In Sierra Leone, local landowners and conservationists have decried plans for a Chinese-funded port they say will impact artisanal fisherpeople, degrade sensitive rainforest and endanger whales, dolphins and turtles. A Chinese-operated gold mine is encroaching on a U.N. World Heritage site in the Congo basin, the world’s second largest rainforest and home to endangered okapi, bonobos and forest elephants. And a railway in Malaysia, under construction since 2017, will fragment and deforest habitats of endangered Malayan tigers, panthers and elephants. 

Environmental campaigners have long pushed development financiers working internationally, like the World Bank, to do a better job of screening out harmful projects. But China’s rapid rise as the world’s largest source of overseas development finance has intensified scrutiny on Beijing. 

Over the past two decades, China has financed more than 20,000 projects across 165 countries, surpassing its Western counterparts in financing and building infrastructure in low- and middle income countries. Its projects are all the more significant as the United States sharply curtails its own global development assistance under President Donald Trump.

Leading experts on the Belt and Road say it’s unclear what China’s development dominance will ultimately mean for the environment because the program is sweeping, its investments are varied and virtually all large-scale infrastructure and energy projects harm nature to one extent or another. What is clear, they say, is that Beijing’s track record has improved, but big risks remain. 

China’s core foreign policy doctrine of noninterference in other countries’ human rights affairs helps Beijing deflect criticism at home and allows its partner countries to do the same, critics say. And many of China’s developing country partners lack the institutional capacity or have been unwilling to safeguard vulnerable communities and biodiversity. 

“Chinese companies have often taken advantage of the lack of, or weak implementation of, effective domestic legislation on due diligence and human rights protection in the countries in which they operate or fail to comply with international standards,” a coalition of Latin American civil society organizations said in a 2022 report on Chinese investment in South and Central America. 

Among the 26 Chinese-financed projects that report scrutinized are the Santa Cruz River dams. 

Today, the project is a monument to the excesses of China’s early forays overseas. But the dams also represent an emerging risk in the new phase of the Belt and Road Initiative: infrastructure projects branded as green and positioned as climate solutions but that may ultimately cause more harm than good. 

At a moment when the dams should be generating electricity for Argentina’s strapped national grid, they sit partially built on the riverbank. Construction, led by the state-owned China Gezhouba Group, has been marred by engineering and planning failures. Costs keep rising. Questions swirl around the impact the dams will have on the Southern Patagonian Ice Field. And scores of containers of archaeological remains excavated from the construction sites sit in a storage facility as the Indigenous communities they belong to wonder what will happen to them. 

Martinez is alarmed that the project seems poised to move forward. With her feet planted in Lake Argentino, she bends down to cup the glacial water in her hands. She takes a sip. 

“Everything is so pure here,” she says. “We have a responsibility to protect this place.”

A Lifeline, a Loan and a Landslide

Aside from the Perons, few families have wielded more political power in Argentina than the Kirchners. Yet, soon after Cristina Fernández de Kirchner succeeded her husband, Néstor, as president in 2007, her administration found itself in a vulnerable position.

Argentina was on the brink of default. And as international credit markets shut their doors, blackouts roiled the country, inflation skyrocketed and foreign reserves dwindled.

Beijing offered a lifeline. 

In a series of agreements between 2009 and 2014, Chinese President Xi Jinping extended Argentina billions of dollars in infrastructure loans and currency swaps—allowing Buenos Aires to exchange Chinese yuan for pesos to meet debt repayment deadlines.

These deals deepened Argentina’s dependence on China, which was aggressively expanding its economic footprint in Latin America. The agreements covered a staggering range of projects: nuclear energy, telecommunications, South America’s largest radio telescope and a Chinese-run space station, over which Beijing secured control for 50 years. 

The spending spree, analysts say, was fueled by China’s excess capacity at home, the need to create new markets abroad and geopolitical ambitions. As Chinese policy banks showered nations with generous loans, some recipient governments aligned their votes at the United Nations with Beijing, including a measure to block debate on China’s alleged human rights abuses at home. 

The centerpiece of the deals with Argentina was the $4.7 billion loan for construction of the Santa Cruz River dams, to be built in the Kirchners’ Patagonian political homeland and with one of the dams bearing the name of Néstor Kirchner, who passed away in 2010. But the dams weren’t only a pet project. Argentina badly needed energy and the dams would, officials said, supply about 5 percent of the country’s electricity.

Adriano Borus, president of Argentina’s dam safety ministry, called ORSEP, said he assumed his team would be involved in the planning process. But in the run-up to the start of construction in 2015, those experts found themselves locked out of key meetings, Borus said, speaking from ORSEP’s headquarters in downtown Buenos Aires in February. 

When he and his colleagues reviewed preparatory technical reports done for the China Gezhouba Group-led consortium, Borus sounded the alarm about concerns with the dams’ geotechnics: The bedrock and cliffs around the planned construction locations appeared to be unstable. 

Borus attributed the rush to financial pressures embedded in the loan agreement. Under the deal’s terms, Argentina’s first repayment was due in 2020—just as the dams were originally set to be completed. The expectation was that revenue from electricity generation would help pay off the debt.

That plan collapsed. The geotechnical problems ORSEP identified reared their heads in 2018 and 2019 when landslides left a 70-meter fissure in a slope near one of the dams.

The snafu has been expensive, requiring what local media has reported will be a $250 million redesign of the project—prompting one of the three construction delays at the sites. A 2017 report from the anti-dam group International Rivers found other instances where Chinese dam companies, and China Gezhouba Group in particular, have plowed forward with construction without conducting proper impact assessments or community consultations, including on projects in Pakistan, Laos and Cambodia.

A coalition of nonprofits filed a lawsuit in 2015, questioning the Santa Cruz dams’ environmental impact assessment. A second lawsuit, filed by lawyer Enrique Viale, alleged that the government official who approved the assessment is the same person who earlier served as director of the contractor that prepared it.

That environmental impact statement, which is supposed to analyze all of the ecological risks of the dams, is “full of deficiencies,” said Cristian Fernandez, a lawyer with the Environment and Natural Resources Foundation, one of the nonprofits behind the 2015 lawsuit. 

It overlooked the dams’ impact on endangered birds and other threatened species. It also failed to examine whether the dams’ reservoirs could raise water levels in Lake Argentino. That would expose more of the glaciers in the Southern Patagonian Ice Field to water, accelerating their melt rates. Those glaciers provide the region with fresh water and supply nutrients to delicate ecosystems, and their loss will ripple globally, contributing to sea level rise and shifts in climate patterns.

Federal agencies that could have flagged these issues, such as the national institute in charge of glacier research, were largely sidelined in the initial assessment process like Borus’ ministry.

The lawsuits prompted another adjustment to construction plans that the consortium said will prevent Lake Argentino’s levels from rising and impacting the ice field. 

Fernandez and others disagree. Argentina’s Supreme Court is expected to issue a final ruling in the case as its next step. When it will do so, no one knows. The court has been fully briefed as of 2021.

At one point, Fernandez had hoped for a political intervention to kill the project.

That was in 2015, when center-right businessman Mauricio Macri replaced Fernandez de Kirchner as president, promising to review many of the controversial deals his predecessor had made with China. In December of that year, Macri’s energy minister ordered a halt on the dams’ construction. 

It didn’t last. 

In March 2016, China Development Bank sent Macri a letter, urging him to restart operations. The bank drew Macri’s attention to a “cross default” clause in the loan agreement. Should Argentina cancel the Santa Cruz dams project, China had the right to cancel funding for railway revitalization in Argentina’s northern agricultural region. Losing that funding would undercut the ability to sell more soybeans, corn and beef—Argentina’s top exports and a source of badly needed foreign currency. 

Macri lifted the construction stay. China Gezhouba Group gifted him a replica of the Three Gorges Dam it had built in China from 1994 to 2012, Fernandez said. 

That Yangtze river dam has devastated the river’s fish populations, impacted migratory birds, triggered seismic activity, increased coastal erosion, forcibly displaced more than 1.3 million people and flooded hundreds of archaeological sites. It does, however, provide about 3 percent of China’s electricity. But whether it will continue to do so is in doubt. The dam, like many of the 300 hydroelectric projects China has built overseas, is highly vulnerable to climate change impacts like drought. 

“I don’t want that for my country,” Fernandez said.

An Evolution in Chinese and US Investments

For much of the postwar era, the United States positioned itself as the vanguard of global development. Heavily influenced by industrial capitalism, that U.S.-led economic model prioritized extraction in the Global South over the environment. Deforestation in the Amazon, oil spills in the Niger Delta and climate change are all byproducts. 

As advocacy groups prevailed upon Western institutions to reckon with this legacy and tighten environmental safeguards, China advanced its own blueprint for development. Its policy banks issued loans with few conditions, opaque terms and little risk assessment.

Early on, the Belt and Road Initiative drew condemnation for expanding coal power, oil and gas and other mega projects that damaged the environment and local communities while leaving developing countries struggling to pay back billions in loans. In response, Chinese President Xi Jinping vowed in 2021 to end financing for overseas coal power, and his government introduced voluntary banking guidelines to screen out high-risk projects. 

Today, Belt and Road is shifting toward what Xi has called “small and beautiful” projects that align with China’s changing priorities. 

The country once again is facing economic headwinds at home. It’s also grappling with an oversaturated home market in electric batteries, wind turbines and photovoltaic panels. That gives Beijing a financial imperative to ramp up its low-carbon investments abroad, according to Ignacio Albe, a researcher at Washington, D.C.-based think tank Atlantic Council.

Since 2023, China has invested more than $100 billion in renewable energy projects overseas, even as overall spending under the Belt and Road Initiative has declined in recent years.

Human rights experts and conservationists worry this green iteration of the Belt and Road could mirror the environmental and social damage of earlier projects. 

“China has been trying to use the U.N. to basically dumb down and largely rip up international human rights standards.”

— Kenneth Roth, human rights advocate

Kenneth Roth, who led the global watchdog group Human Rights Watch for nearly three decades, said Beijing’s motivations haven’t changed. 

“China’s trying to buy loyalty,” he said.

Lacking a democratic mandate at home, the Chinese Communist Party places high value on international legitimacy and is wary of formal condemnations from bodies like the U.N. Human Rights Council, Roth said. In 2019, Pakistan’s then-Prime Minister Imran Khan told Roth that his government’s reluctance to speak out about China’s treatment of Uyghur Muslims, which included forced labor, forced sterilizations and re-education camps, was due to fear of economic repercussions. Pakistan, a majority Muslim country, is estimated to be Beijing’s biggest Belt and Road partner. Pakistan was one of several Belt and Road countries that blocked a U.N. rights council debate on the Uyghur issue in 2022. 

“China has been trying to use the U.N. to basically dumb down and largely rip up international human rights standards,” Roth said. “It has globalized its censorship very successfully.”

This matters, advocates say, because of the growing consensus that environmental protection and human rights go hand in hand, and low carbon sources of energy are not without their own risks.

Mining the minerals and metals needed for low-carbon technologies has been linked to deforestation, excessive water consumption, pollution and human rights abuses. Chinese and Western-led lithium mining projects in Northern Argentina, for example, have strained Indigenous communities’ water resources and prompted rollbacks of their land rights. 

China’s guardrails around environmentally risky projects are beginning to catch up to lenders like the World Bank, said Rebecca Ray, an economist at Boston University who has written extensively about China’s activity in Latin America. 

The difficulty, Ray said, is that many developing countries where China invests have weak environmental ministries and little political will to enforce social protections. China, unlike most development banks and Western governments, doesn’t condition its loans on governance reforms. “China doesn’t care about institution building,” Ray said. “They care about development.”

By 2021, China had environmental and social safeguards in contracts for 57 percent of its infrastructure projects, but only 18 percent showed clear evidence of efforts to reduce environmental and social risks, according to AidData, a university research lab at William & Mary in Virginia.

Some argue that China’s strong, centralized government gives it an edge in advancing environmental protections. Erik Solheim, a former Norwegian diplomat who was once head of the United Nations Environment Program, shares that view, calling China the world’s leading nation on climate and environmental issues.

“Failure to see this is, sorry to say, part of Western arrogance,” Solheim said. “We struggle hard to acknowledge achievements in other parts of the world.”

Yet Solheim, who serves as an environmental advisor to Beijing on the Belt and Road Initiative, acknowledged that some criticisms of China’s overseas record are valid.

“Transparency and all this,” he said, “is not in the Chinese DNA.”

“We’re taking a page out of the Chinese playbook.”

— Michael H. Posner, former State Department Official

Now, Washington’s foreign policy is beginning to look a lot like Beijing’s—but without any commitment to addressing climate change. 

Trump’s second administration has gutted the U.S. State Department’s human rights bureau. Trump has praised and defended Russian leader Vladimir Putin, an autocrat responsible for the mass killing of Ukrainian civilians. And his administration has cancelled or drastically scaled back aid and development programs that promoted long-standing, bipartisan American values like freedom of speech, press and religion. 

“We’re taking a page out of the Chinese playbook,” said Michael H. Posner, a former assistant secretary of state during the Obama administration and longtime human rights advocate.

The White House did not directly respond to the assertion that U.S. foreign policy under Trump is starting to resemble China’s, instead providing this statement: “President Trump has hosted an unprecedented number of foreign leaders at the White House, freed multiple Americans detained abroad, negotiated stronger border protections with Mexico and Canada, and held China accountable for the influx of fentanyl that has killed countless Americans. This President has undoubtedly Made America Strong Again, and the entire world is a better place as a result.”

Now, as Trump discards decades of U.S. commitments to human rights around the globe, billions of people living in authoritarian countries, many of which are Belt and Road partners, will feel the impacts. And so will the United States.

Trump’s America First, like China’s BRI, Posner said, “is not based on some shared concept of how to make the world a better place.”

“A Politics and Money Game”

Ask five locals in the town nearest the Santa Cruz River dams what they think about the project, and you’ll get five different opinions. But there’s one point of agreement in El Calafate: Just about everyone believes the project was riddled with irregularities, favoritism or corruption. 

The China Gezhouba Group consortium won its $5.6 billion construction contract only after Fernández de Kirchner wrested control of the project from Santa Cruz province and allowed the consortium to make an irregular, second discounted offer. 

Then there was close Kirchner associate and businessman Lázaro Báez. Before the dams project was made public, Báez bought thousands of acres of land adjacent to the river. The dams’ reservoirs, if completed, will flood that land, entitling its owner to compensation from the government, giving the owner multiples in a return on investment.

But Báez won’t be receiving compensation. Today, he is in prison for corruption related to a kickback scheme in which his Santa Cruz businesses received a wide array of public works contracts during the Kirchner administrations. 

Prosecutors have filed related charges against at least a dozen Kirchner associates, including the former vice president of Electroingeniería (now known as Eiling), one of China Gezhouba Group’s consortium partners. The official was arrested in 2018 and charged with conspiracy in a bribery kickback scheme involving public contracts. His case is still pending.

The scheme also implicated Fernández de Kirchner herself. She was convicted in 2022 in what Argentina’s public prosecutor called “a system of institutional corruption” linked to the irregular management of public works contracts. Fernández de Kirchner, who has appealed to the Supreme Court, has denied wrongdoing and her supporters claim the prosecution was politically motivated. 

Neither Fernández de Kirchner, China Gezhouba Group nor Eiling responded to requests for comment.

There is no evidence that Chinese officials, or the Santa Cruz dam projects, were part of any kickback scheme. Parallel corruption cases against Fernández de Kirchner and her associates are working their way through the courts and not all evidence has been made public. Separately, China Gezhouba Group was sanctioned by the World Bank for misconduct and by the European Bank for Reconstruction for fraudulent practices in connection with development projects and bids in China and Bosnia. 

Meanwhile, some engineers and researchers have struggled to find a reason why the dams project was ever considered a good idea in the first place. 

The dams are located closer to Antarctica than to population centers like Buenos Aires. Initial plans for the project overlooked the impact of extra high voltage transmission lines and transformer substations needed to move electricity from the sites to the national grid. 

While moving electricity over long distances isn’t impossible, it is difficult and has far-reaching environmental impacts, according to Carlos Tanides, an Argentine electrical engineer who has studied the dams’ feasibility. 

“This is not a rational project,” Tanides said. “What it is is a politics and money game.” 

Many locals also question the project’s logic and planning. 

“The best thing here would be windmills and solar,” river guide Ruben Valle said. “But it’s two dams. It’s very stupid.”

Luis Mansilla, who has captained glacier tours nearly every day of his adult life, is alarmed by the ice fields’ rapid, climate-fueled decline. He thinks the dams’ impact on the glaciers needs to be better studied but doesn’t know if that’s been done. 

“We need energy,” said Masilla, who grew up without electricity. “But it might be better to build dams somewhere else. In Patagonia there is magic. Many places around the world are beautiful, but not like Patagonia.”

A Brutal Past and Present With “No Respect”

On the road that runs from El Calafate’s airport to town, the first thing visitors notice is the shimmering turquoise waters of Lake Argentino. Next, it’s the wagons. 

The weathered, wooden monuments sit on the roadside as reminders of the region’s pioneer history in the late 1800s, when English colonists came to produce wool for global export. What isn’t apparent from the relics is the abject horror that came with it. 

Colonists’ arrival coincided with Argentina’s brutal Conquest of the Desert, a military campaign aimed at eliminating the Indigenous population and integrating Patagonia into the national economy. Many Indigenous Mapuche and Tehuelche people were murdered, forcibly displaced or enslaved, while the government sliced up their territories and doled them out to European settlers. 

Today, there is a burgeoning movement to restore what was almost entirely lost. 

The Tehuelche town of Camusu Aike, home to seven or eight families, is one of the communities working to revitalize their native language and culture. About 400 more Tehuelche members of the community live in the nearby town of Rio Gallegos, where they can find work. 

Camusu Aike is more sky and earth than structures. About a dozen wooden one-floor homes sit along a one-lane dirt road. It’s about a 45-minute drive from the main thoroughfare—depending on the wind. Aside from locals, the only vehicles that use the road are oil company trucks ferrying chemicals and workers to the sites where companies have been drilling on Tehuelche land for decades. In 2015, when Camusu Aike finally got formal legal title over their territory, the oil companies began paying them modest royalties. There was no back pay. 

Today, Camusu Aike has a gleaming elementary school house and community center. The latter is where Cecilia Isabel Huanquetripay is meeting with geographer Guillermo Tamburini Beliveau to talk about the dams and their impacts.

Huanquetripay says that neither the Argentine government, nor the China Gezhouba Group-led consortium, notified Camusu Aike or the other 14 Indigenous communities impacted by the dams about the project, let alone asked them what they thought about it.

It’s the law in Argentina to consult Indigenous people about projects that affect them, and to do so before such projects are approved. Had project managers followed the law, Huanquetripay could have told them that her ancestors are buried along the riverside. So too are a trove of cultural artifacts. 

If construction is completed, the dams’ reservoirs will turn nearly half the river into lake-like water bodies, flooding an area about twice the size of Buenos Aires.

Camusu Aike and other Indigenous communities impacted by the dams filed a lawsuit in 2017 to stop construction until their right to consultation was fulfilled. They also asserted their right to culture, which is deeply interlinked with the river and surrounding ecosystems. 

Attempting to educate the court, one Mapuche leader submitted an affidavit explaining this. He wrote that humans are part of nature and part of the river. The river carries the souls of his ancestors and is itself a living being whose health is imperative to sustain all other life. Damming the river, he explained, is inconceivable. 

The court ruled that the communities’ right to be consulted was violated, and required the government to set up “dialogue tables” with the groups and bring in archeologists to exhume artifacts. At the meetings, the communities fought for ownership of the materials. 

When government officials told the people of Camusu Aike that they would receive a share of the artifacts, the town started thinking about developing tourism as a way to teach others about their culture and to support the community financially. All of that has been put on hold, however. 

When construction was halted in 2023, work on rehoming the artifacts was also stopped. Now, Huanquetripay explained, no one knows what’s going to happen. 

“There is no respect,” she said. “Not in the past and not in the present.” 

The Once and Future Dams

On a recent morning, a dozen dam construction workers gathered in El Calafate’s central plaza beneath a handmade “Reactivate Public Works” sign. As the men beat drums, sipped mate and waved flags, tourists drawn here to see the glaciers walked by without a second glance. 

The delay, the men said, is disrupting their lives—when work stops, so does their pay and health care benefits. They blame one man: Javier Milei, Argentina’s current president. 

The Milei administration declined to comment for this article.

Milei, a Trump ally and climate-change denier, promised as a candidate to slash Argentina’s bureaucracy and stop all public works projects. To make his point, he waved a chainsaw in the air at rallies and declared in Spanish on social media: “THERE IS NO NEW MONEY!” He also made waves during his campaign by calling Chinese officials “assassins” and promising to avoid deals with “communists.” 

In office, however, his stance changed. Among other things, he’s renewed Argentina’s $18 billion currency swap line with China, using some of the funds to meet IMF debt payments. The change in tone, analysts say, is because of the leverage China holds over Buenos Aires. 

When Milei took office in 2023, Argentina again faced an economic crisis. That year, Argentina’s inflation broke 200 percent, its lucrative agricultural exports were imperiled by severe drought and Buenos Aires again struggled to meet its debt obligations. After the International Monetary Fund and private bond holders, China is Buenos Aires’ largest creditor, holding about 13 percent of the nation’s debt.

“If China calls Argentina’s loans, it will heavily destabilize Argentina’s economy,” said Albe, of the Atlantic Council. 

And so, in late February, the same month Milei presented Elon Musk with a chainsaw on stage at a U.S. conservative conference, his administration sent Chinese officials a confidential message. 

Argentina, it said, wanted to restart work on one of the dams.