Overview

The historic agreement at the Paris Conference of the Parties (COP) has 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 critically important that the world continue to scale up its investments in low-carbon and renewable sources of energy, including in hydropower, and the World Bank Group (WBG) is ready and able to help countries to do this.

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 World Bank Group 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 Programme for Infrastructure Development in Africa are investments in hydropower.
  • A central element of the commitments made in Paris is to continue to invest in renewable and low carbon energy so as to help slow GHG emissions over time. Hydropower, which represents some 80% of the world’s installed renewable power generation capacity, is a key ingredient of this commitment for developed and developing countries alike. The new and rehabilitated generation capacity that will be provided by the 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: Apr 05, 2016

Both large and small energy generation technologies are necessary for increasing access to electricity for the poorest. Off-grid solutions are rapidly advancing and the WBG is supporting the adoption of these technologies around the world. From 2000 to 2013 a total of 17.5 million people received direct access from World Bank energy access projects, of which at least 5.8 million— or about one third— received off-grid access.

The World Bank will continue to support grid based solutions when they represent the most viable and cost-effective solution for providing household energy access at scale, as well as for providing sufficient electricity for business development and economic growth. Large grid based hydropower, and particularly storage or pumped-storage schemes, are an important complement to more variable renewable technologies such as solar and wind power, offering improvements to grid stability and voltage control.

Financing: Since the 2003 Water Resources Strategy, which states that the World Bank would re-engage in hydraulic infrastructure, about 150 projects related to hydropower have been approved. This represents a total of US$13.6 billion in financing (US$7.8 billion for hydropower components) and includes IBRD/IDA, GEF and Recipient Executed Activities. Roughly half of the 20 projects in the pipeline are in Africa.

Sustainability: World Bank engagement in hydropower focuses not only on financing projects, but also on building the capacities 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 Bank Group has developed safeguard policies used by many that address and reduce potentially adverse social and environmental impacts. The Bank Group 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 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.

Last Updated: Apr 05, 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 project affected families recorded a real 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 the 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 the cost of power delivery. The total project cost is about $4.2 billion for the first stage, which consists of two phases and a total installed capacity of 1,080 MW in each phase.

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 who will benefit from the incremental power generation. The project aims to do this by facilitating the expansion of 80 MW hydropower generation capacity and construction of transmission lines. It will also allow for greater power trade between Rwanda, Tanzania and Burundi. Power generation expected from the project, at an estimated cost of $ 0.062/kWh, is expected to dramatically reduce costs and replace thermal generation in the region, at the exceedingly high cost of about $ 0.25/KWh.

Last Updated: Apr 05, 2016