China has become one of the world’s largest lenders in overseas development finance. Development projects, such as roads, railways and power plants, often drive biodiversity loss and infringe on Indigenous lands, yet the risks implicit in China’s overseas development finance are poorly understood. Here we examine the extent to which projects financed by China’s policy banks between 2008 and 2019 occur within and adjacent to areas where large-scale investment can present considerable risks to biodiversity and Indigenous peoples. Further, we compare these risks with those posed by similar projects financed by the World Bank, previously the world’s largest source of development finance. We found that 63% of China-financed projects overlap with critical habitats, protected areas or Indigenous lands, with up to 24% of the world’s threatened birds, mammals, reptiles and amphibians potentially impacted by the projects. Hotspots of the risks are primarily distributed in northern sub-Saharan Africa, Southeast Asia and parts of South America. Overall, China’s development projects pose greater risks than those of the World Bank, particularly within the energy sector. These results provide an important global outlook of socio-ecological risks that can guide strategies for greening China’s development finance around the world.