Hydropower is not only a vital renewable energy resource, but for many countries, it is the only renewable energy source that has the potential to expand access to electricity to large populations.
When designed properly, hydropower projects can deliver benefits far beyond energy and water security. They often lead to investments in roads, social infrastructure, communications, and skills building to support local or regional economic development. They could also provide power generation for industrial, manufacturing and commercial operations that create jobs.
The World Bank Group is firmly committed to the responsible development of hydropower projects of all sizes and types— run of river, pumped storage, and reservoir—including off-grid projects meeting decentralized rural needs.
Sustainability: Hydropower projects entail significant economic, environmental, and social risks, which must be managed carefully at all stages. The Bank Group has developed safeguard policies used by many that address and reduce potentially adverse social and environmental impacts. The Bank Group also 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 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 World Bank Group) came together to define the tool and we will continue to engage with the forum that governs the Protocol to encourage its use and improve the tool over time.
Financing: Over the period 2002–14, World Bank Group funding of more than $8.8 billion has contributed to the installation or restoration of 17 GW of hydropower. The World Bank typically acts as a “convener,” bringing other financiers to the table. Over the last five years, World Bank financing covered around half of the costs of the projects it financed (55 percent), with the balance coming from other players, such as host country governments (19 percent), the private sector (15 percent) and other development banks (10 percent). The World Bank only supports hydropower projects of demonstrated economic viability. For all projects, the macroeconomic and fiscal effects and risks of its investments on the national economy of the country are carefully assessed.
Last Updated: Apr 10, 2015