A US strategy for energy competition with China in emerging markets

The United States faces a strategic challenge in competing with China for influence in developing-country energy markets. As emerging economies drive the largest share of energy demand growth over the next two decades, the countries that supply these markets will define technical standards, financing norms, and long-term political alliances governing future energy systems.

China has positioned itself as the dominant partner through the Belt and Road Initiative, combining concessional loans, export credits, and turnkey project delivery. Between 2013 and 2021, Chinese development banks issued over $230 billion in energy and infrastructure loans, offering governments a comparatively simple package in which financing and implementation were closely linked. This model reduced the administrative burden on local officials and helped Chinese firms secure durable positions in future procurement and service markets.

The United States brings different strengths, but its approach remains harder to navigate. Support is fragmented across the US International Development Finance Corporation (DFC), the Export-Import Bank of the United States (EXIM), the Department of Energy, and the Department of State, each with separate mandates and processes. As a result, host-country ministries often must negotiate financing, technical assistance, and export support through multiple channels, creating transaction costs their weaker institutions struggle to absorb. 

Although recent steps such as DFC reauthorization have expanded US capacity, financing remains constrained in scale and speed relative to Chinese policy banks, and US-backed projects continue to lag in both responsiveness and market share in key regions. One example is sub-Saharan Africa, where some estimates indicate Chinese financing supported more than 40 percent of new power sector investment between 2010 and 2020, while US development finance accounted for less than 5 percent. 

These gaps point to a practical agenda for near- and medium-term reform. In the near term, the United States should build on the DFC reauthorization by reinforcing EXIM’s long-term lending authority with stable authorization and launching a Strategic Energy Guarantee Facility to mobilize private lending. Longer-term steps include increasing the DFC’s risk appetite, expanding local currency tools, and developing dedicated financing approaches for specific project portfolios. At the same time, US businesses would have greater opportunities if US support were better coordinated across agencies and if technical assistance were available to host governments for procurement reform and project preparation. 

Policy recommendations:

1. Scale and de-risk US financing to compete at speed and volume. Build on DFC reauthorization by reinforcing EXIM’s long-term lending authority, expanding DFC’s effective capacity and risk tolerance, and establishing a Strategic Energy Guarantee Facility to mobilize private capital in higher-risk markets. Over time, expand local-currency tools and enable more direct engagement in large, public-sector infrastructure projects to increase participation in priority markets.
2. Create a unified US delivery model that is easier for partners to access and execute. Establish DFC-led coordination in priority markets through embassy-based investment leads and a single energy engagement platform that brings together financing, technical assistance, and project support. Complement this with forward-deployed project development teams and stronger project-preparation capacity to move opportunities from concept to bankable tenders more quickly.
3. Link US engagement to procurement reform and long-term system influence. Support partner countries in adopting procurement frameworks that incorporate life-cycle cost, transparency, and cybersecurity considerations, while expanding regulatory and institutional capacity. Use financing and technical engagement to reinforce these practices over time, ensuring that US-supported projects shape future procurement, standards, and market participation.

The United States is most competitive when it aligns finance, delivery, and political support into a package partners can navigate quickly and trust long-term. The strategic objective is straightforward: ensure partner governments see a clear, reliable path to build modern, secure energy systems with American technology and capital on terms that are transparent, sustainable, and resilient.

Steven Burns is an energy and critical infrastructure security expert with more than two decades of experience spanning the US government and the private sector. He most recently served as director for energy security on the White House National Security Council staff, advising senior leaders on energy supply disruptions, allied support, and infrastructure resilience amid geopolitical crises. Prior to that, he was chief of energy and infrastructure at USAID’s Bureau for Europe and Eurasia, where he designed and led assistance programs focused on energy-sector cybersecurity, electricity and natural gas network planning, and utility disaster preparedness and recovery across priority partner countries. 

Earlier in his career, he advised electric utilities and multinational industrial companies on power asset development and procurement strategies, and authored technical work on power system and nuclear component operability. Across his career, he has managed large, multi-country portfolios and mobilized substantial investment toward secure, reliable infrastructure outcomes. Burns holds a PhD in engineering management from the George Washington University, an MS in mechanical engineering from the University of Massachusetts Amherst, and a BS from Carnegie Mellon University, and is a registered professional engineer. 

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