China’s “Belt and Road” Initiative has been the main driving force for the coalfired power projects investment since 2013. Under the background of global lowcarbon and green development transformation, the economic feasibility of coal investment is declining, and the risk of “stranded assets” will force the host country to rely on loans or financing to build coalfired power projects to face the consequences of increased debt burden. Though China’s investment in coalfired power projects does not trigger a “debt trap” effect, it significantly improves the proportion of shortterm debt to total debt stock. The conclusion is verified by a parallel trend test and a placebo test. China’s enterprises and financial institutions should intensify risks assessment and management as well as reduce or avoid investment in carbon intensive projects and promote the transformation of green investment, contributing to the “Green Belt and Road”initiative and the United Nations 2030 sustainable development goals at the same time.

“Belt and Road” Initiative; coalfired power projects investment; debt trap; difference in difference