Worldwide, 1.2 billion people lack access to electricity. Of these, 590 million live in sub-Saharan Africa—about two-thirds of the continent’s population. Another 418 million without electricity live in South Asia. In many countries, access to electricity is below 10%.
Countries cannot realize sustainable economic growth and poverty education without a stable supply of electricity. It enables children to study after dark, clinics to store medicine safely, and people to charge their mobile phones, which they use to access development or business opportunities. Industry and business stagnate where electricity is absent or unreliable.
Along with constrained access to electricity, by 2025, 2.4 billion people will be living in countries without enough water to meet all their needs. Water security is threatened by increasing demand for water, mismanagement of available water resources and increasing changes in weather patterns due to climate change. Every year, floods and droughts cost 5-10% of GDP in countries with negative consequences that linger for years.
Hydropower is the world’s largest source of renewable energy, accounting for a fifth of global electricity. Hydropower has helped drive economic growth in numerous countries, including Brazil, Canada, China, Norway, and the United States.
As demand grows for clean, reliable, affordable energy, along with the urgency of expanding access to reach the unserved, hydropower has assumed critical importance. Not least, this is because sub-Saharan Africa, where the access deficit is largest, has 400 gigawatts of undeveloped hydro potential—enough to quadruple the continent’s existing installed capacity of 80 GW.
Lessons from the past, together with emerging global dynamics, have recast the role of hydropower and prompted revived investment, along with rehabilitation of existing capacity.
The opportunities are great. But hydropower development poses complex challenges and risks too. These risks vary significantly by the type, place, and scale of the project. And while large storage hydro may offer the broadest benefits to society, it also tends to present the biggest risks. Reservoirs sometimes mean resettlement of whole communities, the flooding of large areas of land, and significant changes to river ecosystems.
These risks are not to be taken lightly. They must be managed and mitigated. Over years of experience in implementing complex hydropower projects, the Bank Group has developed expertise to ensure that they both bring benefits to the poor and help grow economies, while minimizing environmental impacts.