Overview

Hydropower is the world’s largest source of renewable energy, accounting for a fifth of global electricity. Harnessing water responsibly can help get electricity to millions of people, especially in sub-Saharan Africa and South Asia where lack of access to power is most acute.

The historic Paris agreement last year committed the world to an ambitious target to hold the increase in the global average temperature to well below 2 °C and to pursue efforts to limit the temperature increase to 1.5 °C.  In this context, it is important that the world continue to increase investments in renewable sources of energy, including hydropower, The World Bank Group (WBG) is ready and able to help countries to do this.

While hydropower development offers great opportunities, it also comes with complex challenges and risks that vary significantly by the type, place, and scale of projects. Factors such as resettlement of communities, flooding of large areas of land, and significant changes to river ecosystems must be carefully considered and mitigated. While it is known that reservoirs emit greenhouse gases (GHGs), their net emissions, on average, are much lower than those from fossil fuel based sources of electricity. Today, hydropower reduces annual global emissions by some 2.8 billion tons of CO2 equivalent every year.  The WBG will continue to support well-designed and implemented hydropower projects of all sizes for both local development and climate mitigation reasons.

A number of the world’s most electricity-poor countries also have some of the least exploited hydropower potential, and hydropower represents the most economically viable, large scale source of energy for their development – particularly in Sub Saharan Africa. For this reason, nine of the 15 energy projects prioritized by African governments within the 2012-2020 Program for Infrastructure Development in Africa are investments in hydropower.

New and rehabilitated hydropower generation capacity that will be provided by WBG-supported hydropower projects, approved between 2002 and 2014, will avoid approximately 1.1 billion metric tons of cumulative GHG emissions over the economic life of the projects.

Last Updated: Sep 22, 2016

Since the 2003 Water Resources Strategy, which states that the World Bank would re-engage in hydraulic infrastructure, about 150 projects related to hydropower – including rehabilitation, technical assistance and greenfield projects – have been approved. This represents a total of $13.6 billion in financing ($7.8 billion for hydropower components) and includes IBRD/IDA, GEF and Recipient Executed Activities. Roughly half of the 15 projects in the pipeline are in Africa.

World Bank engagement in hydropower focuses not only on financing projects, but also on building the capacity of governments and their partners to design, build and operate economically, environmentally, financially, and socially sustainable hydropower.

Hydropower projects entail significant economic, environmental, and social risks, which must be managed carefully at all stages. The WBG has developed safeguard policies that address and reduce potentially adverse social and environmental impacts. The WBG helps client governments strengthen their capacity to incorporate environmental and social dimensions in hydropower projects at an early stage. That typically includes consultations, benefit sharing, and inclusion of indigenous peoples.

We also support the Hydropower Sustainability Assessment Protocol, an enhanced sustainability assessment tool, which provides a useful and comprehensive framework for hydropower developers to monitor and benchmark the performance of their projects. The private sector, governments, NGOs, and multilateral organizations (including the WBG) came together to define the tool and we will continue to engage with the multi-stakeholder body that governs the Protocol to encourage its use and improve the tool over time.

Last Updated: Sep 22, 2016

A brief overview of the WBG’s engagement in hydropower can be found here. Some specific project examples include:

India: Rampur Hydropower Project

In December 2014, the 412 MW Rampur run-of-river project was fully commissioned. The project was conceived as an important step in improving the reliability of India’s Northern Electricity Grid through the addition of flexible, low carbon energy. With an IBRD loan of $400 million, the project constructed the run-of-river facility, which is being operated in tandem with the existing Nathpa Jhakri Power Station. A final impact evaluation of the project show improvements in many important social indicators, including increases in literacy rates, permanent housing and size of houses. Moreover, 99% of families affected by the project recorded an increase in assets and/or income.

Pakistan: IDA Credit and Guarantee Dasu Hydropower Project

By delivering 2160 MW of clean hydropower, this project will improve access to socio-economic services for local communities in Pakistan and boost its utility’s capacity to prepare a pipeline of hydropower projects. The project, approved in May 2014, will benefit millions of consumers in Pakistan by easing the country’s power crisis, reducing persistent blackouts and cutting power delivery costs.

Rwanda, Tanzania and Burundi: Regional Rusumo Falls Hydroelectric Project

This $469 million project aims to help people in the northeast region of Tanzania who are not currently connected to the grid, and customers of utilities in Burundi and Rwanda get access to electricity. The project aims make more power available to these three countries by facilitating the expansion of 80 MW hydropower generation capacity and construction of transmission lines, allowing them to trade electricity easily amongst each other. Power generated from the project, at an estimated cost of $ 0.062/kWh, is expected to dramatically reduce costs and replace thermal generation in the region, which currently costs about $ 0.25/KWh.

Last Updated: Sep 22, 2016