Um I would like to welcome everyone to this last session of a two-day webinar uh on hydropower. Um, we now go to the last session and, uh, uh, very fortunate to have Gabriel Azevedo, uh, who's going to moderate this session. Uh, many of us know Gabriel. Um, he's a very special with, uh, experience, all-round experience in hydropower as a consultant, as a banker, as a contractor. So he's got a very good, uh, all-round experience and very thankful to Gabriel for moderating this session. Over to you, Gabriel. Thank you, Praveen. Uh, good afternoon, everyone. Uh, well, uh, warm welcomes to the audience, uh, everyone that's, uh, participating in this great conference. I want to congratulate, uh, Rainaid and the World Bank Group. This has been a very nice, uh, two-day event. And I think that the previous session provides a very good leadway to this final session on investment and financing. We are very fortunate to have 5 wonderful speakers with us here today. That are going to bring to the discussion, uh, diverse perspectives, uh, both from, uh, the public, uh, as well as the private sector, uh, financing, uh, perspective with a diverse geographic focus. This is excellent, so I'm sure that's going to be a very rich session, uh, and. In spite of the different perspectives, uh, preparing to, to this session today, one observation to, to kick out the discussion in terms of investment in financing hydropower is that, uh, better projects uh Facilitate or hugely uh expand the opportunities for accessing different types of financing. So, good projects or developing good projects uh remains as a goal for the hydropower industry. And I I think our first speaker, uh, Bent Bruns, um, an energy specialist, a senior energy specialist with the World Bank who currently manages the hydropower development facility, we would likely touch on some of these issues. Uh, Beth, thanks for being here and over to you for our first, uh, presentation. Thank you. Thank you so much. Um, I got a good opportunity today to uh also talk a bit more about the hydropower Development Facility. That is a joint program for the World Bank and also the Energy Sector Management Assistance Program, also known as SMAP. First, I would like to go through a bit more of the World Bank's assistance to hydropower developments over the years. And then, I would like to highlight that since 2002, the bank has supported 143 hydropower projects. And it's a total worth of 30.2 billion, and we have installed about 42 gigawatts. This said, uh, it's also shown that Only 27% of new hydropower capacity over the last decade has been added by the private sector. And then only 90% has been exclusively financed by public sector. And this difference also applies to the fact that there is a difference between large hydro and small hydro, where the private sector focused mostly on the small hydro projects and public on large. And The World Bank has worked with hydropower since the beginning. Um, we have set out the directions back in 2010 that we're still working on. There are 5 priority objectives. That we will, that is also uh one of the foundations for the hydropower development uh facility. And one is scaling up finance. And the other is to promote good practice. And as uh Gabriel was in on uh talking about, is that the better project, the better it will be financed, too. Uh, we will also support our strengthening planning, uh, purposes, both in governments and other. Entities, this uh spans from enabling policies and regulatory frameworks and institutions so that we help to realize the strategic value. This will encourage the leverage regional development. We have recently seen a new report on the SDG 7. Uh, goal where we see that we have an uh we have a positive trend in uh reaching. Uh, energy access on a global scale, but that there are some regions that are still struggling with Uh, increasing their renewable energy generation. And of course, it is also to build partnerships, where we've seem to, over these two days that we have a lot of good partners and we will continue to work with, and we do also seek new ones. It As I mentioned, um, the SDG 7 report says that we, we have a positive trend, but there are still 789 million people living without access to electricity. And As we have discussed, hydropower is one of the important renewable resources. It can and it is delivering energy at an affordable and competitive price, and it will help countries meet their climate targets. And this is also where the World Bank has identified approximately 30,000 megawatts in hydropower projects worldwide. And these are in different stages of assessments. Um As I began to say, uh, SMP has a renewable energy program in their new in our new business plan going forward. Uh, we work across. Different pillars, uh, to Achieve the overarching objective of universal access by 2030. And this involves, of course, also the decarbonization strategy. And going forward, this will be a lot of Uh, the focus areas for SMAP, and we will also see that under renewable energies, uh, we work with solar and wind. And as we briefly touched upon in the previous session where we're talking about floating solar on, uh, reservoirs, and also the interaction with a hybrid of a hydropower plant combined with solar and so on, which will be very much in our focus going forward. And This brings us to the final the objective of the hydropower development facility. It's one to accelerate energy access, and then it's also to support VBG clients to develop. And build and operate the next generation hydropower projects. The hydropower development facility is based on 4 different core areas. And I think that these core areas are very important to achieve our aim to build sustainable hydropower. And this is also something that I've seen firsthand working with building hydropower plants in Liberia in Africa, where It takes the entire project organization from the government and policy side, from the donors down through the project implementation unit, the owners, engineer, and all the contractors and all the workers to be able to work to. Achieve this project. It also takes an interaction with the communities around to ensure that we are able to deliver the project in a safe manner, and we do know, don't do any harm to them or to the nature and that we have a good communication on what this project actually is. Um, so, this is where, um, the hydropower development facility can go in and we tailor our uh support to the needs of the project. So, say you have a stability project where you do the start with the design, um, going forward now, we will have a very important focus that every single hydropower plant should enable the integration of variable renewable energies. And that enabling also is determined by how our unit is designed, how a waterway is designed, how the dams, and how we also uh are able to take care and incorporate all of the environmental social frameworks. Um, we will also, you can also go in and support on the project implementation, and that is from the beginning to also for the operation and maintenance side. And I think that this will Put the emphasis on where hydropower is. Important for the future and also for climate mitigation and adaptation. Thank you. Oh, I would like to add that um the hydropower development facility is supported by these donors. It's Austria, Norway, Switzerland and Iceland. We would very much like to thank them. And if anybody else are interested to support the agenda to build back greener and better, we do welcome them aboard. Thank you so much, uh, Bent, and I'm, I'm sure, uh, we're gonna have some questions about the facility and, and, uh, that after this session, uh, your email, hopefully will be crowded with requests for, for information. This is a very great initiative that, uh, uh, I know, I'm sure it's gonna lead to, to very positive results. Uh, our second speaker today is a dear colleague from, from the IDB Group, Arturo Alarcon. Arturo is a senior energy specialist with our infrastructure our energy infrastructure, uh, group at, at the IDB. He is currently based in Brazil and he serves. As the focal point for hydropower in the, in the IDB. And whereas many of us are talking about primarily new projects, green field projects, Arturo has been leading a very nice initiative at the IDB in Latin America on Working with existing projects, uh, brownfield projects on improving, uh, their performance on modernization, and, uh, there are many, many gains from that process. So with that, over to you Arturo. Thanks for being here. We cannot hear you, Arturo. I think you're on mute. I think we are having a little bit of, OK, here, here's a go ahead. Thank you. Having some troubles. I will ask if you could share my presentation from there because I have some problems sharing it from here. OK, so we're I'll pull it up. So, many thanks, uh, and sorry for the, for the delay, uh, technical problems. I, I don't know if you, you can share my presentation. We are trying to do it, uh, uh, there you go. Thanks, Ben. So it's, it's up Arturo. There you go. Many thanks. Uh, so first of all, sorry for the delay, and I would like to thank the World Bank for organizing this. I think it's a very timely meeting, uh, in, in times of the, of, of the pandemic. I think it's very good to discuss how hydropower can be. Uh, a part of, of the package for development and for economic recovery. The next slide, please. Uh, I will give a regional perspective and just as an introduction, uh, we are a regional bank, uh, we, we are a group, the IDB Group that has three institutions. Uh, first, the IDB, which is the, I would say the public institution. We work mainly with governments and publicly owned entities. IDB Invest, which is our private branch where Gabriel works as a colleague. Uh, and the IDB Lab, which is the, the innovation hub. We have 48 member countries, but we lend to 26 countries in the region, mostly Latin America and the Caribbean. Next, please. So, why is hydropower so important for us? Uh, I would say we are a hydropower region. We are the region that has the highest share of hydropower in the matrix. Uh, our electricity matrix is 60% renewable energy, and from that 40% is hydropower. And as you can see in the, in the graph in the left, Uh it's been growing constantly. Uh in the decade of the 70s and 80s, we had an average of 6 or 5 or 6 gigawatts per year in the region. And, in the decades from 90 up to now, we have uh around 2 to 3 gigawatts on average per year. Uh next slide, please. That uh leads to Countries that have a very high reliance on hydropower in the, in their matrix. You can see from one extreme that is Paraguay, which is 100% reliant on hydropower or countries like Colombia, which is 70%, Brazil, which is 62%, and it's the second country in the world in terms of install capacity. Venezuela, Suriname, uh, and so on. Costa Rica, which also has a 100% renewable matrix, thanks to hydropower. We rely on hydropower historically, and now hydropower is enabling. The region to install solar and wind energy. Uh, just as an example, Brazil has already more than 20 gigawatts of, uh, solar and wind energy. And we all know that, that, that won't be that couldn't be possible without hydropower as, as a storage for the system, uh, and providing the The services that the system needs. In terms of new installed capacity, I, I put the table uh at the right just to highlight the last few years. We have, uh, what we could say it's a healthy growth for hydropower. It's about 6 gigawatts per year on average, but that's influenced by Brazil a lot, and that's Belmonte, we could say. Uh, Belmonte is like half of that. Uh, so if we see the countries that are not Brazil, that growth is, is not that large. We are talking about last year, 300 megawatts of hydropower installed that went into operation. And we expect in the coming years, that trend. We, we expect fewer plants, probably plants of uh medium capacity, around, I would say 100 to 500 megawatts, not, not so many megapower plants and more smaller, uh, uh, small hydropower. But it will continue to grow. Uh, the region has Still a hydropower potential that is between 200 and 400 gigawatts, depending on, on how you assess the, the potential, but we, we've only developed half of our potential. So, it, it still can grow and can grow sustainably applying all the tools that we've been discussing in the previous sessions. Next slide, please. But a key part of, of what I mentioned is that our hydropower fleet is getting old. And why is this a big problem? Uh, it's a problem in some regions, but if you depend on 60% of your power on power plants that are already old, and we are talking about 100 gigawatts in the region, that's half of the installed power in the region that has more than 30 years, or one third of the power plants have already More than 40 years. So, if we are relying a lot of our hydropower in aging assets, we need to include this in our planning efforts and we need to develop regulatory incentives for these assets to continue to be part of our power systems. So the, the, the figure on the right, uh, that, that shows How, what's the percentage of the hydrocapacity that has more than 20 years? And, and we, we see this as the potential for modernization and rehabilitation because we are Talking not only about uh civil works or electromechanical equipment, but also plants that will change the way they are operated. We are changing from a baseload generation to a more variable and flexible generation that will need to adapt for uh non-conventional renewables in the matrix. Next, please. So, we, we've done a, a preliminary assessment of, of what are the investment needs for modernization. We conducted a study with the International Hydropower Association. Uh, it was finished uh a few weeks ago. We assessed all, all the power plants that have more than 20 years of age and more than 10 megawatts, and we conducted an assessment one by one. And we determined that there is a need just considering electromechanical equipment and electrical equipment. Of $33 billion of investment in the next few years. We divided the plans uh among the ones that have a high need of intervention of, of investment, that's 15 gigawatts or $5 billion. And the ones that have a medium need, that means that they are still running, they are still OK, but in the next 5 years, we'll need to think about investing in them, and that's 47 gigawatts and 26 billion. Uh, the figure in the top right, it shows the contribution per region. We have Brazil, obviously, it's the top contributor, uh, southern core, which for us is Argentina, Chile, Uruguay and Paraguay, the Andean region, it's all the countries from Venezuela to, uh, Peru and Bolivia, Mexico and Central America. But the, the key message there is, there is a huge need and a huge opportunity for investment in modernization, digitalization, and refurbishment of, uh, of our power plants and, and the need needs to be included in our planning efforts. It, it's not competing with other technologies, it's not replacing other technologies, it's complementing other technologies. Next, please. Uh, so, just showing a, a sample of our recent projects, and that includes the ones we, we funded with uh private funds and with public funds. Those are the projects that are in execution and that were concluded in the last 5 years. The ones on the top are greenfield projects. So we only have 33 to show. We have uh some, some smaller ones. And the, the list uh at the bottom are the modernization rehabilitation projects. So, you, you can see there is a, a key focus. On our work supporting more uh rehabilitation and modernization efforts and well, but, but also uh new, new developments. All, all of that, uh including obviously environmental and social safeguards. And one key point that, that I would like to mention is that we are also supporting uh institutional strengthening. Uh, together with IHA we've done a, a congress in the region, uh, regarding digitalization of hydro, hydropower. Uh, and we plan to move on this work, uh, creating more discussion and, and capacity with, uh, policymakers and regulators to include this as, as part of our regulations, as part of policies that are developed in the region. So that will be all from my side. Many thanks. Thank you so much, Arturo. Uh, it's a very nice perspective on, on our region. Uh, and I, I really like your, uh, point on no competing but being complementary. I think we talk a lot about expanding, expanding, and we talk about the environmental impact. And even when we talk about non-traditional renewables such as wind and solar. Sometimes we ignore what we can do in terms of, you know, uh, fairly easily and with low impact getting increased capacity and longevity from our existing system. So I think this, this is a great initiative and, and in good hands in Latin America with your leadership. Our next speaker, uh, Mahan Warrush is a senior investment officer at the IFC. Um, she is the global sector leading hydropower and wind energy, and, uh, Mahan is gonna bring to us today, uh, the perspective of perhaps a large financier in the private sector on, on, on energy projects. The IFC and I do hope that she is able to touch on two questions that every time we talk about hydro and the future always come to mind. Uh, first, why hydro? Uh, what's the place of hydro in a world of cheap renewables? I think that's a key issue. And obviously, what are the key risks for private sector investment in hydro. So, with that, over to Maha, thanks for, for being here with the group. Thank you, Gabrielle, for that, uh, um, introduction. And uh thanks, Bente and Arturo for, uh, for very insightful presentations as well. I found them. Um, so let me try to share my presentation first. OK. Do you see the presentation? Yes, we do, Maha. um, yeah, it's on, on, on the screen. Perhaps if you can maximize it and put on the presentation mode on your, uh, PowerPoint. Yes, excellent. Thank you. OK, so I'll start off with the first slide, which addresses um your, your question of why I see, um, you know, support is supporting hydro in this world of cheap renewables, as most of us may know, with solar tariffs coming in as low as $2.4 in Tunisia and $2.8 in, um, uh, in Egypt, um. Uh, and, and solar and wind also having, um, you know, lower technical risks, shorter construction periods, lower, far fewer environmental and social issues. Um, it's often questioned that what's the rationale for hydros, um, given the complexities. But, uh, from IFC's perspective and hopefully from the private sector's perspective, we do think hydro is very important for the energy mix for a number of reasons. Uh, first of all, hydro provides, um, baseload power, um, which is much needed. Hydros can also provide peaking power, and, um, Arturo, I think, mentioned that a little that they can be used for more flexible power. Um, so, so that's another, uh, advantage. Hydros also provide, um, frequency regulation from, from a system level perspective, from a grid perspective, they provide, uh, frequency regulation, voltage support, and, um, Help with grid stability. These are all very important ancillary services that wind and solar do not provide. And then, um, from a system dispatch and integration standpoint, they're easier to manage and provide for reliable forecasting compared to more intermittent sources. So, um, so, so from a, from a system system perspective, uh, these, these factors actually not only make hydro attractive on their own, but because of these features, they also facilitate greater penetration of solar and wind as we see more and more solar and wind. Investments coming into, um, into the grids for most countries, we need more, um, hydro and thermal base load type of technologies to make sure that these intermittent sources can be easily integrated. And, um, and hydros, um, provide an advantage over thermals that they're clean, a cleaner source of energy, um, and also they're not exposed to, to fuel supply or not vulnerable to fuel price, um, volatility, and for some countries which import fuel, the effects of foreign exchange fluctuations. So all these factors make hydros, um, a very attractive option. Also, in some countries, they provide seasonal complementarity to, um, uh, to wind and solar, and then in some of our client countries, we, we don't have solar and wind resources, where then hydros is even, uh, obviously becomes even more important. Um, and then, um, and then finally, I, as I also said, hydros are built to last 50 years and beyond. And if you do interesting things that, um, Uh, IDB is doing, they can last even longer with electromechanical refurbishment. So, so these are all the benefits of having, uh, hydros and why IFC thinks that we should continue supporting hydros. Um, just, uh, very briefly to give an overview of the global share of hydros, despite, um, uh, the share of global share of hydros coming down and share of wind and solar going up, hydros still remain the largest, the biggest contributor to, um, uh, to renewable energy installed capacity, um, global renewable energy installed capacity at 16% of the total, of the global. Um, uh, electricity installed capacity, um, at, uh, 13, at just over 1300 gigawatts globally. Um, just looking at 2019, although the share of hydro declined over 2018, um, it was still pretty large at 15.6 gigawatts. And if you look at the top 10 countries which added hydropower, uh, to their systems, um, most of them are, um, from IFC's perspective, our client countries. So that, that's why we still see opportunity, um, in hydro investments, uh, going forward. Um. Briefly, the slide provides an overview of IFC's track record on in hydropower investment. Uh, so since 2010, IFC has arranged about $4.7 billion in financing, including mobilization as well as, uh, mobilization from other lenders and IFC's own account investments. Um, the current exposure to hydropower investments for IFC's own account only is at $1.3 billion. If you go back further, since the 1990s, IFC has raised about, um, Uh, $7 billion including our own investment, and that's, that's what we've provided in financing to the hydropower sector, supporting about 8.4 gigawatts of hydros. Um, as you can see from this chart, um, in line with global trends, even IFC's share of hydropower investment, this red line, it's trended down. Um, so, uh, but we, but it still remains a sizable portion at like 31% of our renewable energy portfolio. Um, The, the, the biggest, uh, sort of IFC's biggest role in hydropower investment is in developing and financing these greenfield projects. And since 2010, IFC has developed and financed about 17, uh, greenfield IPPs for, um, 3000 mega for a total of 3000 megawatts. Um, and of these 17 hydropower investments, uh, 4 are still under construction. Some of the recent landmark projects include the 420 megawatt Natagal hydro project in Cameroon. I'll be talking more about it later in the presentation. And, um, another landmark project is the Upper Treasury project in Nepal, 216 megawatts. That was the first one, first private hydropower in Nepal. Moving on to the next slide. Oh So, um, so I think this is where I'll hit upon, um, uh, Gabrielle's, your, your point on key risks that we see in the hydropower sector and how IFC seeks to manage those key risks, uh, for ourselves as well as other lenders and the private sector. Um, as we all know, for hydros, one of the main risks is the technical risks, um, mostly arising from the geological, hydrological, and seismic complexities and uncertainties. These can often lead to, uh, cost overruns and construction delays. IFC has, um, IFC has faced significant cost overruns from underground, uh, from underground geological works. They've been Some tunnel collapses, repairs, slow tunneling progress, but we've, um, we, and together with our sponsors and other lenders have, um, sustained them, and many of our, as I mentioned earlier, uh, many of our hydropower projects are operational now. Um, other issues are, uh, evacuation and, um, evacuation and access to hydropower sites. So how do we manage these key risks or what is extreme the technical risks? Extremely important is the technical preparedness for projects at an early stage. So doing thorough geological investigations during the pre-implementation phase, these can be time consuming and costly, but obviously, as in that's investment of time and resources was made. Um, it's important that they're experienced independent engineers that review those geological investigations and analysis, and then, um, they're experienced design firms that undertake design, uh, taking into account the, the findings from those geological investigations. Um, and then they, uh, it's preferred that they're third-party verifications of those project designs. So, uh, so it's, it's very important that these projects are, Um, are developed in this way from an early stage to de-risk them. Um, and then other things that become very important are the quality of sponsors, the quality of EPC contractors. It's important they, each one of them have, um, uh, significant hydro experience. Um, it's important for the sponsors to be long-term strategic, um, uh, players in the sector with commitment to the hydro sector. It's important for both EPC and the sponsors to have the financial strength because there can be a big cost overrun, so they should be able to absorb those cost overruns and sustain them. Um, they should have the staying power. Uh, the quality of owners engineer is also very important, and their experience. And then, uh, the, uh, the contractual framework in the markets that we operate in, it's important that they allocate the technical risks appropriately, and that's where IFC also plays a role together with the World Bank Group to make sure that happens. Um, and then, based on all of this, then we get into structuring and financing, financing considerations. I won't go into those details, but it's important that, um, the contingencies are sized appropriately and the sponsor support is sized appropriately, and we do all the relevant stress testing. Um, so that's on the technical part. Moving on to the other big risk for hydros is on the environmental and social front. Um, I think we, we all are aware that, um, there, there can be community impact from, from hydros, uh, resettlement issues, and related compensation and, uh, livelihood restoration, um, issues. Then the labor issues, um, including living conditions, uh, uh, you know, labor compensations, safety standards during constructions. And then, of course, uh, there is, uh, the issue of, uh, managing biodiversity and critical habitats in these projects. So how I've seen manages these, uh, these risks is working very closely with, uh, the investment teams work very closely with our environmental and social specialists from, uh, from a very early stage to make sure that these risks are properly assessed, identified and assessed, and then, Um, satisfactory mitigation measures are put in place that are implementable and have broad support, and then our ENS colleagues remain very involved, uh, during the whole implement, uh, construction phase to manage these environmental and social risks. And then finally, um, the market risks, and this is not specific to hydro, this is, you know, applies to other power sector investments also to make sure the risks are that we don't want to end up in, An oversupply situation where this hydro project that lenders and developers have taken so long to develop, become uncompetitive and are exposed to market risks. Um, so again, early stage involvement, just thrashing out the project rationale, you know, doing at an early stage, assessing the project from a demand and supply perspective, and seeing whether how it fits into the energy mix of a country, how it compares to alternative sources of. A generation and if it's attractive compared to long term marginal cost of the system, these are all sort of these factors need to be analyzed at an early stage to make sure that the project remains competitive through its long term. And then obviously doing the necessary stress testing to see if the potential cost overruns, the likelihood of which is high for hydro projects, what impact will they have on project economics and, and generally project competitiveness in the sector. So, um Moving on now, um, this is, so this is also a continuation of how I look at it is how I see manages hydro risks and how I see, um, um, you know, develops strong projects and, uh, projects which are able to attract the private sector and keep the private sector. Uh, in them. So, it's, it's very, it, we, what we call is the Cascade World Bank Group, uh, Cascade approach, um, which is Which is basically, um, we, we try to work, um, across the World Bank Group leveraging all the different institutions and the instruments to, to develop strong projects and de-risk them to attract the private sector in, um, where, where all the private sector can come in, and then only save the public sector resources for areas and sectors where we're not able to attract the private sector. So, uh, so this is increasingly, we're following that this cascade approach. So, the cross-cutting collaboration within the World Bank Group to develop these strong projects. Um, so, for example, in the hydro sector, World Bank will be used to influence public sector policies. Um, uh, and, uh, uh, areas such as power sector planning, increased, uh, electrification, tariff and subsidy reforms. These are, these are areas that create an enabling environment for the private sector to come in. And then IFC comes in at an early stage. We have an early stage investment platform called IFC and Preventures, which provides not just not only capital project development capital, but also resources to help develop the project. Um, and then obviously IFC arranges the debt financing, um, and mobilizes other lenders, and, uh, and, and, um, and also mobilizes the private, uh, equity capital. There's IFC advisory that, uh, kind of does similar work with, um, uh, and sometimes collaborates with the World Bank Group in advising government counterparts and capacity building and, The competitive auction designs, and then we have IFC blended finance, which can provide de-risking instruments and concessional instruments to enable private sector participation. And then finally, it's mega arm, which provides political risk insurance and credit enhancement. Uh, so all these institutions can work together to develop these strong projects and make, make these projects more attractive to, to bring in the private sector. Um, so I just have now, I'll end with an example, a case study where we could see a demonstration of this, of this cascade approach and World Bank, uh, this cross-cutting collaboration between the World Bank Group. This is, um, the Naj de Gaal project, which I mentioned earlier, 420 megawatt project in Cameroon, um, the largest IFC's investment, uh, largest IFC investment in Africa, um, and at the time. It's, it was a euro, it was a €1.2 billion project, um, owned by the French utility that was the main sponsor, EDF with a 40% share, and then IFC also put in equity for 20%. So the, the, the, the country challenges that this project addressed was that 40% of the country lacked, um, access to electricity, so there was a need for more electricity. And then, The, the country's fiscal position, um, did not allow it to spend public sector resources on, uh, on addressing, on, on financing this new generation capacity. Uh, they were in an IMF program and the risk of external debt distress was high. So, what this project did was, um, and what IFC together with World Bank Group Collaboration, what we did was to, um, mobilize the private sector to come in to provide, um, this generation capacity, uh, and increase the country's generation capacity by 30%. Uh, how did IFC do it? Again, as I mentioned earlier, early, uh, early engagement in the, in the sector through our, uh, Infraventures, uh, not just in the sector, um, on a project level through, um, uh, this Infraventures platform. Uh, we got involved 5 years before the financial close, um, so provided capital as well as staff resources. This early engagement translated into robust project development, de-risking the project and making it, increasing its appeal to, uh, commercial lenders. I've seen the World Bank work very closely with the government on sector reforms and to address bottlenecks, to create an enabling environment for this project. The World Bank also financed a dam downstream, um, which improved the hydrology for the whole river. World Bank provides basin management and dam safety across Cameroon, as well as supporting the transmission company. And, and then IFC was finance financing package of greater than €1.1 million. What's interesting was that there were 11 DFIs and 4 commercial banks that were mobilized, and then, um, and then a very innovative local currency. Uh, instrument was also developed as part of this project, which, uh, which mobilized €170 million of long-term local currency, unprecedented, long-term local currency financing, financing with an unprecedented maturity of 21 years. And then there were World Bank and MIA guarantees as well. So, um, that's about it. Well, Mahan, Mahan, thank you so much. Uh, no, I'm sure there will be, uh, questions about, uh, the cascade approach and, and the examples, and thanks for asking the questions on, on risk. Uh, uh, our next presenter, um, uh, Andres Peterson is the Chief Regional Power Officer, uh, power systems officer at the Africa Development Bank. I had the fortune of working in several hydro projects in Africa for many years on construction of projects in Mozambique and Angola, and on the development of projects in Ethiopia and Tanzania, and I know, uh, we have of the special challenges and opportunities to work with these projects in, in Africa. So we're all delighted for, uh, for having Andrew's uh perspectives as part of this debate. So Andres, up to you. Thank you. Thank you so much and I've just realized that I am, uh, the last presenter, uh, in a two-day session. So I have one more. We have Paul after you, so just to, you are OK, 22nd last. All right, so, but, but I'm sincerely hoping that I will not be repeating, uh, what has already been said by my distinctive, uh, predecessors. Um, so I, uh, sit in the Southern Africa office in Centurion outside of Pretoria. So I will use, uh, Southern Africa examples and I will speak mostly to the experience that we have in Southern Africa. Um, I've been asked to talk a little bit about how hydro power trends from Southern Africa, uh, power poles and transmission. Been asked to talk a little bit, uh, to, uh, balancing versus baseload discussion, uh, rehabilitation, it's already been mentioned by others, but I will, uh, still, uh, talk a little bit to that. And then I've been asked to end up with uh a brief overview of the African Development Bank's, uh, various instruments. that we can put into play in hydropower development in Africa. Um, let me start by just presenting, uh, uh, some brand new projects. I didn't want to go through the whole portfolio and show a lot of stuff that a lot of the very informed people, uh, in this conference probably know about already. Um, we've just, uh, started our engagement, uh, in Madagascar. Uh, in a very exciting project called Sahufica, uh, hydropower Project, uh, where we are actually involved in 3 levels of the project. It's a private prompt, it's a private developer company who will do the actual hydropower station. But we are part financing, uh, one of the transmission lines that are required to serve to evacuate the power. We will be providing a partial risk guarantee and we have also quite uniquely uh actually funded the government's equity position. They will take a minority post in this project. And the dividends that they will derive from their direct equity position will then be recycled into um additional funding for access projects in Madagascar. We think it's a very promising, uh, private public. It's not a formal PPP structure per se, but it's a very exciting private-public. Um, cooperative project. I also wanted to just put forward a small project. Uh, we're currently working actually with UNDP to uh rehabilitate, um, a, a small hydropower plant in the island of uh principal part of Satoma and Principe. Of course, this in the global, in the global, uh, picture, uh is not a very important project, but it's a very important project for Principe. Uh, and, uh, uh, Sautom and Principe are in the, uh, one of those unfortunate countries that have allowed their renewable assets, their hydropower stations, to deteriorate to the point that almost all their current power needs are covered by diesel generators, and this is very unsustainable. So together with other partners, World Bank, the European Investment Bank, UNDP, UNIDO, and a few others. Uh, we're all working full-time to try and, um, bring the country back on a, on a green path. Uh, we're also involved in, uh, a project that I'm, I'm quite sure that a lot of people are knowledge about, knowledgeable about, uh, the get fit approach in Zambia, uh, where we are lined up to provide, uh, some of the financing for, uh, the various bidders for Um, uh, for the, get, uh, sorry, for the, um, various private entities who will be getting involved in this, we have lined up, lined up credit lines for them. Um, hydropower trends, uh, I think, uh, it's important, um, it's important to realize that, uh, still only about 10% of potential in Africa has been developed. Uh, I believe that in Europe, it's the other way around, about 90% of the potential hydropower has been developed. So there's a lot of, um, There's a lot of potential in Africa that still could and probably should be developed. Uh, currently in the region, we see a very large expanse expansion of capacity in Angola, but we also see that, um, The uh need for transmission, uh, is something that should not be underestimated. I think when these projects were originally developed in Angola, the idea was that they would use the power domestically, but now with the current crisis, uh, Angola is looking at uh quite an extensive uh over overcapacity and, And other countries in the region have a deficit of power. So this highlights um the need for transmission. Uh, I think there's a lot uh of interest eventually. The pump storage has traditionally not been a big topic in Africa, but I, I think, uh, I am predicting that it, uh, that it will become more important. Uh, South Africa has a, a couple of installations there. It's certainly part of the South African, uh, integrated resource plan to perhaps develop one or more installations and, uh, some of the neighboring countries, uh, might also, uh, start showing interest in perhaps in smaller pump storage facilities. Um, big versus smaller, uh, we all know that big, uh, that potentially big hydropower stations, uh, have a Lower levelized cost of energy. But, uh, what we've seen in Africa is that the very large projects tend to take a very long time to develop and it raises the question of whether portfolio of medium size or smaller hydropower plants actually to some extent makes more sense. Um, a couple of questions that we perhaps need uh to uh keep a strong eye on is, of course, climate change, climate vulnerability. Uh, we still, we heard from the IFC that they have been able, able to do some very exciting stuff in Cameroon and we ourselves are very proud of our engagement in Madagascar. But there is still a need to, uh, in terms of trends in hydropower to further develop the involvement of the private sector. And I also think that we, there is a need to, in, in Africa to go over, uh, the reward for wheeling. A lot of, if we look at the Southern Africa Power pool, some countries have very large hydropower resources, other renewable resources. Some other countries have pretty significant needs to import power, but there might be a country in between. And uh we need to ask ourselves if the country in between and the owners of transmission assets are being rewarded correctly and realistically, because if they're not, this is bound to create certain issues in terms of how attractive they think it is for them to be an active. Uh, uh, in partnering, in some of these projects. Uh, I just wanted to raise the very recent reforms in Namibia that are quite exciting, that could also, uh, be of importance in, in the hydropower space. Uh, Namibia has now introduced a 70-30, um, principle where high voltage and medium voltage customers are able to buy 30% of their power directly from IPPs. Such a model across the Southern Africa Power pool, if this was allowed, would give a lot of comfort to a number of developers if it was actually possible to be. Based in one African country and at least 30% of your power could be freely sold to somebody else in the whole power pool. Um, I wanted to just come, uh, I, uh, I was very intrigued by the, um, presentation from Latin America because we have some very, very, very similar issues in Southern Africa. I, uh, I'm sure that everybody has been following, uh, the, uh, IDB presentation. So there's no reason for me to go over some of the technical and environmental reasons for, for targeting rehabilitation. Um, but just in the region, uh, you know, the largest installation in the region, uh, is the Kaboabassa. It was completed in 1974. Uh, the Kariba Dam, uh, the first stage was, uh, completed as early as 1959, and the second stage was completed in 1977. So obviously, those are the two, some of the, actually the two largest stations in Southern Africa. And, and I think it's obvious that, uh, That they are getting uh slightly long in the tooth. Um, we are, uh, among other people, uh, looking at, uh, uh, helping the owners of the Kabora Bassa dam, but the, the This is not the time and place to go into details about that. I also wanted just to highlight the case of Malawi and the value of the interconnector being developed by the World Bank with the support from a Norwegian trust fund. I see my Norwegian colleague, uh, in the corner of my screen. So let's just highlight the importance of that project. Malawi used to be, uh, an, uh, uh, an island, uh. And, uh, it was an island system, an isolated system, and the interconnector will actually be key to not only developing their resources, but also, uh, Uh, the fact that they have some very, uh, very old, uh, power stations, uh, that are, are in need of refurbishment and this will only become possible once they have an interconnector so that they can actually get power from somewhere else. Uh, on the other side of my slide, uh, I'm aware of the fact that, uh, that I'm, uh, being asked to be a bit quick. So if I speak very quickly, I apologize for that. Um, but of course, uh, looking at the, uh, right-hand side of the slide, you know, Southern Africa, uh, has very good land-based wind resources, also has good offshore wind resources, but that's a different, uh, presentation altogether. It has very good, uh, solar resources and You know, when we, uh, engage in some of these rehabilitation projects, one of the things that we need to, uh, emphasize is the need to make these plants much more flexible if possible, so that they, to a much larger extent, can, uh, support these new resources coming in, uh, solar and wind. Uh, at the very bottom of the slide, uh, I'm sure this has been mentioned before, so I'll not go into details, but it is, of course, extremely attractive when we do. Uh, rehabilitation also to look into co-located solar, just a large, large scale solar PV next to, uh, coming back to uh Kaborabasa, for instance, uh, it has some of Africa's best solar resources just next to the dam. It's a pretty obvious idea that using the same transmission line and the same, uh, substation, uh, assets will make for quite an attractive price of the solar PV investment. Uh, alternatively, or, uh, uh, uh, in complementarity, one could also consider floating solar PV that, uh, have some additional advantages in terms of, uh, reducing evaporation. Um, I'm on my last slide just to give comfort to, uh, to the, to the, uh, gentleman in charge of, of this exercise, um. The African Development Bank has a whole range of instruments. I think one thing that I'd like to stress is that, uh, the African Development Bank is uh not separated into uh separate institutions like our much bigger sister, uh, the World Bank. So we have, uh, as it were, the IFC, the equivalent of the IFC and the World Bank, uh, either instruments under one roof. So, it's basically an overlapping team. We do have a, a, a bit of a differentiation between the teams who work on private and public projects, but we, we sit together and we have this uh advantage of being able to use uh to work together, perhaps, uh, a little bit more closely than some other organizations. Um, I'm, I'm sure that everybody who's listening in to this, uh, are familiar with, uh, with what is under the bullet, loans and equity and sovereign and non-sovereign, and so on. So let me just jump into the very last bullet in my last slide. Special funds, which are grants. We have a very, very, uh, large, uh, attractive Um Grant-based, uh, trust fund called Sustainable Energy for Africa. It's, uh, it is absolutely an opportunity for people to, uh, come to us to where we can provide grant for project development of, uh, what we call green baseload. Uh, and where we can also provide some additional funding. Um, for these type of projects. Um, with that, I would like to stop and I look forward to questions. Thank you so much, Anders, and yeah, your last point brings us to one of the initial points that I made in order to reinforces regarding the fact that developing good projects and, and being able to access financing is fundamental and it, it's, it's so glad to see the strong initiative by the African Development Bank on, on, on project development. Our last presentation uh today is uh from Paul Connor. Uh, Paul Connor is an executive director at JP Morgan. Uh, he has over 20 years experience on sustainable, sustainable financing. Uh, as many of you know, uh, JP Morgan, uh, just created this year its own, uh, development branch, uh, which has been an interesting, uh, uh, uh, uh, result or interesting. Uh, uh, outcome in the market, and I'm sure Paul is going to be able to, uh, talk to us about the role of investment banks and in, in the market and, and green sustainable, uh, sustainability bonds and how this market is evolving and how it applies to, uh, hydropower. Uh, for post-presentation, we're going to use a video and then after the video, we will be open to questions to our presenters. So with that, please run the video. This, uh, discussion session. My name is Paul O'Connor. I'm a director at JP Morgan. I look after our green and ESG debt for the AMEA region. My background is environmental science and engineering. I previously worked in consulting before joining the banking industry in 2012. Uh, my current role involves helping our clients to develop green social and sustainability bonds and execute them in line with current voluntary market standards. So, in terms of the role that investment banking industry can play generally in the hydropower space, um, we obviously provide all the traditional lending and banking services as one might expect, including, uh, participation in, in project financings. However, I think probably the most important role the investment banking industry can play is facilitating access to, to very deep pools of uh global capital. And now those pools of capital are increasing. I, I am sorry, I think we are having a problem with the video. Let's, let us try again. Um, Power and utility are increasingly what we might broadly call um responsible investment opportunities and the debt market in particular I think is increasingly open for business on this sort of theme. Um, if we turn to the green bond market in particular, I would say that the power and utility sector is, uh, one of the larger green bond issuers in the market and again a large proportion of these green bond propositions are linked to renewable energy. And I would say that renewables probably account for, I would say the greatest proportion of uh green bonds proceeds that uh we see in the market where label bonds are concerned. Um, I would also add that, um, responding to climate change risk is uh very much a dominant theme in the responsible investment industry and therefore there continues to be a, a great opportunity to highlight the role of hydropower in, um, delivering the shift to a, a lower carbon energy system. So, in terms of the uh challenges faced in delivering this opportunity, I would say that um some green bond investors are quite sensitive to the various environmental and social risks which are associated typically with some of the, the larger hydropower projects in play. And I think the most important question for me is, how can we provide the right level of information in the context of a typical debt transaction to allow these potential investors to gain some comfort that the various risks have been managed effectively. Uh, I would say that debt investors generally and, and green bond investors in particular are increasingly including what we would, um, generally call an ESG risk review process when they're looking at buying debt instruments. Now, it's worth noting that many investors are still building the capacity to process technical, environmental and social risk information and data. And I would say it's uh quite common for investors to rely on thresholds around capacity, uh, generation capacity that is, and other forms of proxy information when they're making decisions. So, for example, investors are likely to be more comfortable with, with a smaller capacity, run a river type technology projects in say high-income OECD countries where there is limited adverse media coverage involved. Uh, compare and contrast that. For example, with larger dam projects in, in emerging markets where maybe there's some noise or some ESG related controversy uh around the projects and that sort of thing is, um, is something that investors will, will potentially be nervous about. So, I think what we need to try to do when we're talking about using the debt capital markets and, and green and label bonds um to help us kind of grind down. The, the cost of financing these projects is that we need to do what we can to strike some sort of a balance between providing uh sufficient um proxy type information to help investors make an informed decision without overwhelming them because a lot of investors cannot process the typical level of environmental and social information and data that would be generated by the average hydropower project. So, this is where things like carbon intensity of generation thresholds, say for example those set in the, the EU taxonomy or say for example scores generated by the um IHA's sustainability protocol can be very helpful in um in generating a base of information for investors that doesn't require them to process uh a lot more technical information than they, they have the capability to process. So, um, that's the sort of, uh, challenge that I see and then I think the, the key area that we need to address going forward. So, that's all I wanted to say in terms of introduction, um, and very much look forward to the discussion. Thank you. Thank you, Paul. Um, thank you very much. Um, uh, so, after this very interesting presentations, I think, uh, I would like to open up the floor to our audience to ask questions. I want, however, to make just one comment, uh, to the organizers and to the industry in general. Uh, my first job in a hydropower project was as a resident construction engineer in 1988. And, uh, one of the signs that I see of great evolution and great hope for our industry is being in a meeting like this and seeing 2 out of 5 presentations led and delivered by Female colleagues and hydropower professionals. This increased diversity in our industry, I think, gives us hope that the future is going to be different, uh, and even more exciting, uh, than the past. So, congratulations, uh, my special congratulations to the organizers. I don't think it was intentional, but, uh, I think it's a great thing to see, especially for an old, uh, old-timer like myself. I think with that, uh, we're starting to receive some questions. I will kick off with one question to, to Paul, mix up the order a little bit. Uh, Paul, um, if you can hear me, uh, I'd like to, to, like, uh, the question has two parts. First, uh, how interested are investors in the, the green investment space? That's, that's the first part. And the second part, There have seen, there have been in the market already some cases of what's called bond washing. So the second part then is, how do you see, is there a differentiation between investors that are really, really interested in the substance from those that are basically trying to get a seal of any sort. So Paul, over to you. Sure. So, uh, well, thank you for the question. I mean, in terms of interest, I would say interest is expanding rapidly, but it's quite um geographic specific. So I would say it would be quite difficult to find an institutional investor in Europe right now that is not in some way looking at ESG or green or. Social or sustainability in some way. It's become a competitive pressure for the investment industry. So in order to gather assets from asset owners, they need to be able to show that they can manage assets in line with ESG or green principles or whatever the asset owner preferences. So I would say definitely in Europe there is a lot and an increasing interest in in allocating. To green or responsible investment opportunities, the US is probably 2nd in terms of geographies, and I would say that is a bit more patchy, kind of east coast, west coast. Depends on who you talk to, but again, generally there is an increase in interest, and a lot of the global investors that have desks in Europe obviously will There will be some sort of cross fertilization of ideas there onto the US side, but you have to, um, you have to sort of target the conversation specifically in the US. I think Asia is getting going, uh, Latin America and Asia. I think it's, it's awareness is increasing, but we, um, you know, we're still waiting to see some of the larger commitments around allocating capital in favor of ESG or green teams in those markets. Regarding the second part of the question on bond washing. Um, it's, it's very difficult to say any one thing about the buy side or the way investors are, are, are doing things in this space, but I would say the ability that the investors have to actually see through the label and really understand the proposition and, and penetrate the story, if you will, and sort of ask more probing questions, that is noticeably increased, uh, particularly in Europe over the last couple of years because the investors are are staffing up with ESG specialists, and those people are there to actually, you know, test the proposition and to be able to engage in a relatively sophisticated dialogue with the issuer. So I think the risk of bond washing is definitely going down because people know they won't get away with it. Um, so we are seeing people being quite cautious because they know that they will be tested on their propositions. So we expect that to increase and we expect to see investors being able to ask more and more of the right questions which should hopefully manage down that, that risk of bond washing or greenwashing or whatever you might want to call it. Um. Every investor is doing their own thing, as I say. Some are investing in ESG capacity. Some will still buy a green bond if it has a green label because they have a green fund or a segregated fund, and everybody makes their own decisions, but I would say there is more effort to counter the risk of greenwashing by building up the ESG expertise within the investor side. Paul, a very nice perspective on, on, on those, uh, issues. Uh, we have a question here for Andres regarding, uh, what would be the biggest, uh, in your view and experience, Andres, what would be the biggest challenges, uh, to, you know, get sustainable projects implemented and operated in, in the African continent, uh, and I would add to that if you can add a perspective, is getting The private sector involved are particularly difficult in Africa. Thank you. Um, thank you for a very interesting question. I think, um, We have a, a general issue in Africa with uh the preparedness of projects. Uh, unfortunately, uh, it's one of the things that the African Development Bank is very conscious of and trying to help with. But a lot of projects, um, have difficulties uh getting to, to the starting line. Um, we're, I'm just reviewing an interesting internal report before it's going to be published and, and there's a lot of uh issues around. I think uh we also have to recognize that Africa is a very, very large continent. Uh, uh, transmission is, is, can be an extremely large burden. The cost of transmission, the simply distances are longer. Uh, countries are, some countries are relatively small. So it means that if you want to justify a country in a relatively small country, you need to be able to also send perhaps some of that power outside of your country, which complicates things in terms of currency risk, in terms of who pays for what. I alluded to it in my presentation. Um, I'm not sure that we have worked out everything in terms of who benefits from wheeling and, and, and whether we have the right setup for, for Pan-African transmission. Is it more difficult than in the rest of the world? Um, Not necessarily, I would say. I think it's, I don't think you can say that, you know, and there's no such thing. You know, Africa is a huge continent. So, so I, I don't think, uh, you can generalize and say that, you know, things are more difficult in Africa. Uh, there are also, let's be positive, there are also huge examples of, of, uh, of captive demand. Africa has very large, uh, mining resources. Uh, some of these resources are extremely important for Some of the new technologies coming into play. Um, so they will also, uh, one could also turn, turn, turn your question around and say that Africa is uniquely blessed. It actually has some very, very well-capitalized, uh, mining companies as an example who could, uh, take all the power that you need, so you don't actually So you don't actually have the risk of, of, uh, of a, a poorly capitalized national utility. You have somebody making tons of money on cobalt or gold or Something of that kind. Let me stop there. Alexandra, very, no, thanks and thanks for turning it around. Very, very interesting perspective. Uh, Mahan, uh, I have a question here that I think it's, it's, uh, for you. Uh, during your presentation and when you were talking about the why, uh, hydropower in a world of, of low renewable cost, you, you did mention the synergies and The, the, the opportunity to provide optimal system services and through hydropower leveraging, for instance, the expansion of other uh uh renewable sources. Uh, can you give us a little perspective or a brief perspective on how is the IFC promoting those, those synergies and, and, and those uh complementarities with hydropower systems? Uh, thank you, Gabrielle. So, um, so IFC has, how IFC is managed is basically, most of our operations are managed by regional teams, and under those regional teams, directors, their, their country strategies. So, um, so, you know, there would be for each country, there would be a country strategy and a power sector strategy for that country. So, as, as part of that, obviously, sometimes the transactions that come, it's more opportunistic, but more and more, it's getting more strategic where, um, where the, where the country teams would come up with the power sector strategy, and then that's, uh, the global teams, which is, I'm part of the global team. We would provide our feedback on that country strategy and what the mix looks like and provide feedback on, Uh, you know, where we think the complementarity could, could come from. So it's a combination of the country strategies, country teams, where the opportunities are, where the investor interest is, with an overlay of, uh, you know, some global and portfolio oversight to provide feedback on where they should. Um, where they should be going. Obviously, it's not always, it's not always ideal. We can't just say, oh, this is what the sector should look like, because we also have to match it with the realities on the ground and where the investor interest is and where the opportunities are. Thanks, Mohan. Uh, so let's, uh, move on then to, to Arturo now. Uh, uh, Arturo, I think there was a lot of, uh, good feedback about your presentation focusing on modernization. Uh, Andres mentioned that, uh, they face similar situations in Africa, and, uh, many of the presenters talked about facilities and improved the quality of projects focusing on greenfield. The question to you is, what are, what is the IDB Group doing? To, uh, uh, induce or to work with clients in terms of their best choices or doing the best choices for the modernization of projects and, and how can uh regional DFI like the IDB help clients in making those choices and implementing them. Thanks for the question. Uh, well, I think we, we work at, at two levels. Uh, at the regional level, what we are doing is creating the awareness that this is an issue that needs to be taken into account, uh, by planners and regulators. And we're doing this with studies, with, uh, seminars, workshops, and so on, and trying to engage the people in charge of policy and, and developing policies for Creating incentives for uh modernization of hydropower. For example, an example is, is Brazil that at the moment doesn't have uh incentive for capacity, for installations of capacity that could be put in place for value hydropower that is modernized and adds capacity to the system more than energy. So, we are discussing that with EPE, the planning agency, and discussing that with the ministry. So, we're doing that. Then at, at the specific level of uh power plant owners and operators, we have technical cooperation resources, non-reversible, and we will work with them in developing long-term uh plans. Uh, a good example is Salto Grande, which is uh, the binational uh hydropower plant between Argentina and Uruguay. We had a 2 million or around 2 million technical cooperation with them for 3 years that helped them develop a 20-year plan on how they should modernize their assets and to stage all the interventions. It's a very large power plant and it's obvious that they are not going to modernize it in 2 years. It's a 20-year plan. And, and the third level, I would say is knowledge transfer in the field. We try to organize uh seminars with plant plant owners and operators and to exchange knowledge and experiences, bringing some experiences from Europe, from the US where modernization has already taken place in the last decade. So, I think it's, it's the, those three areas. Thanks. Arturo, uh, uh, a question now to, to, uh, Ben in terms of the hydropower development facility Ben. Perhaps you can take a minute or two to tell us what are the next steps for the hydropower development facility at the World Bank. Uh, our next steps, uh, are first to continue to support projects in the different regions that the World Bank operates in, and in particular, we would like to support more projects in Africa where there is a very large uh potential to unlock. And then we will also work more on our own managed global products, which were one of them related to the topic for this session, and that's also private financing of hydropower projects and how we can unlock that. So our overall aim is to create more projects that have come to the point of development that we can satisfy requirements for also for private financing. Thanks, thanks, Ben. Uh, we have only a few minutes. There is a question here that it's, uh, it doesn't have a specific speaker, but perhaps, uh, Majo Andres, we would have to answer quickly or, or both can, you know, say something about it. I'll read it to you. Government PPA guarantees can result in significant contingent liabilities, especially when combined with other off-balance sheet liabilities. Do you think this will be a significant constraining factor going forward? It, it relates to PPA guarantees, current PPA guarantees, and I think you can check the question on uh your chat. So, if Andres or Maha would like to take a few minutes, no, 1 or 2 minutes to say something about it, the floor is open. Sure, I can, I can come in on this, um, and, and if you have more, um, to add. So we do see this issue crop up in some, uh, and we're seeing this issue crop up in some countries where governments themselves are concerned about, um, about the level of, um, indebtedness, um, and. What the governments are trying out is if they can move to more of a merchant market, uh, structure, um, that we see in some of the more developed countries in Latin American countries or Turkey, for example, where there's a combination. So, um, now that's, it's yet to be seen whether some countries, some of these countries are ready for that, um, but they could be interesting structures. I think with more privatizations of utilities, um, and utilities becoming direct off-takers, they could be interesting structures where they, you know, the, the top few customers can be, the receivables can be securitized against that you provide. Bank lenders can provide financing. So, so there could be interesting structures like that, but again, it depends from, from country to country. But this is definitely an issue coming up, and hopefully we'll be able to find ways around it, and it shouldn't be a constraining factor in growing the business and meeting energy needs. Thanks Maha Andres, uh, in a minute, any thoughts or reactions to this? Yeah, very quick one. I mean, uh, we, we do have, um, I, I think, uh, to, to adding to what my IFC colleagues said, um, we're looking at not necessarily in hydropower, but we're looking at, uh, some projects in Zimbabwe, where, uh, obviously there's an issue with, with the currency and other situations where, where basically the PPA, uh, potential in these potential projects would be locked into directly. Uh, uh, so that some of these plants are, are basically merchant plants that are providing power to, uh, uh, a diamond from its facility or a, or a, a gold mining operation and so on. And therefore, there is this opportunity that it's off the balance sheet of the government and, and we get uh uh the, the, the, the security or the The, the safety that we require by these entities uh being able to uh export and, and therefore there's a, there's a freely available cash flow uh. And it doesn't actually arrive on the balance sheet of the nation. Well, thanks, that's definitely an issue that uh uh will continue to be part of the agenda. Unfortunately, we are running out of time. Uh, and, uh, before inviting, uh, Pravin to, to close the conference, I just want to take 30 seconds to first say thanks to the audience, very, very special thanks to the presenters. It was fascinating to me, I hope, and I'm sure that those that participate equally enjoyed your presentations and, and answers. Thank you very much. Congratulations, Praveen, to the entire world uh group uh team again for the organization. And just on 2 seconds, uh, uh, summary that I took with me in terms of priorities going forward, I think I heard, uh, things on continuing to refine the need for hydropower in the future, de-risking hydropower in general as a very important aspect, better projects, uh, better financing, uh, synergy with all the renewables continuing to be an, an untapped opportunity. Much more needs to be done on that. Uh, a lot of room for modernization of the existing park and proportionately, uh, the industry is not paying as much attention to it as to greenfield projects. So these were the main points I took with me. Obviously, there are others. I hope we can continue this conversation at a future time. And with that, thanks again. And Pravin, over to you. Uh, thank you, uh, Gabriel. Can you hear me? Yes, we can hear and see you well. OK, thank you so much. So ladies and gentlemen, uh, this brings, uh, the virtual hydropower conference, uh, to an end. Many thanks to all the presenters and participants for their time and contribution to a highly rewarding discussion about the role of hydropower in helping to deliver the clean energy transition. This was clearly stated by our vice president Makhtar Diop in the opening welcome speech. Uh, as well as some key sustainable development goals. The clear message from this conference was that hydropower has and will continue to play a key role in ensuring that cleaner, more affordable, and more reliable electricity is available to not only those who have access to electricity, but to the hundreds of millions of people who still don't. Its ability to offer flexible dispatchable electricity to power systems around the world is, if anything, becoming increasingly important with the growth of variable renewables and the loss of dispatchable fossil fuel generation. I'd just like to highlight some key takeaways from the conference. So hydropower plays and will continue to play a key role in the clean energy transition, uh, with its flexibility allowing for the integration of variable renewable energy. As we heard during session 1 in the Himalayas, every 1 megawatt of hydropower installed, another 5 or 6 megawatts of wind and solar can be integrated. And existing infrastructure can be optimized, for example, through the installation of floating solar PV or by directly integrating large scale solar and wind projects with existing or new pump storage. Secondly, hydropower, it's the role is changing rapidly as the volume of variable renewable energy increases and fossil fuel generation is decommissioned. The increasing demands are placed in hydropower and fast evolving power markets that require technological innovation and increased digitization. Uh, the Swiss secretary made this clear, uh, and, uh, talked about the market, uh, evolving market conditions in Switzerland. Uh, extensive R&D initiatives underway globally to address the need for power system flexibility from both a policy and regulatory perspective, as well as from a technological point of view. Various R&D initiatives are underway to address these issues, and you heard about the example of the XFlex hypergram in Europe. Um, The interconnected regional grids allow hydropower to better complements. Other generation, as was the case in Norway as stated by Euben Johansson, numerous presentations underlined the benefits that hydropower brings as part of interconnected regional grids through a combination of optimal energy resource utilization and complementary production, as well as providing security of supply and cost synergy. This was also highlighted by the honorable minister from Nepal. Numerous challenges remain, uh, including need for new market design and enabling framework to remove barriers and attract investment. The vital ancillary services that this form of generation provides and the flexibility it offers are currently not rewarded, and we talked a lot about how to, um, value the, the, the services that hydropower makes. And the hydropower industry has to make a stronger case to policymakers about its role in terms of long-term system planning, remuneration of its service, and also tax burden compared to example, fossil fuel generators. While hydropower clearly has to be part of the clean energy solution to meet climate change goals, it has to be developed sustainably respecting international ENS standards. The World Bank is keen to start discussion with other MDBs on the use of sustainability protocol tools to ensure that international ENS standards are streamlined. So, uh, uh, and last but not least, the conference underlined arguably above all the incredible international collaboration, the World Bank and other multilateral and bilateral financial institution and development banks, as well as agencies such as IHA, IEEA, and IRENA will continue to play an important role in the development of sustainable hydropower. In this context, I would just like to inform you that starting from this fiscal year, the infrastructure vice presidency at the World Bank will establish the Energy Global Knowledge and Expertise Unit, hosting a, a group of global teams. In priorities infrastructure subsectors including hydropower, these teams will be responsible for delivering on global analytical tasks and for supporting country and regional operation and analytical engagements. The hydropower Global Solutions Group will take the lead in the hydropower dialogue. So, uh, finally, uh, I'd just like to mention that the hydropower Day that we had planned to take place in DC or face to face was converted to a virtual format due to COVID-19. Uh, and I'd like to acknowledge support from Richard Taylor and Kate Steele in London. Uh, Usaid, uh, Caseweite in Washington, Vente Brunes in Oslo, and Martin Badet in France. Uh, we could not have done this in such a short time. So a huge thank you and thank you also to ESMAP for hosting the hydropower Development Facility. Finally, thanks to all the panelists, moderators, and those of you listening on YouTube. Stay safe and see you at the World Hydro Power Congress in Costa Rica. Thank you so much. Thank you.

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Speakers: Pravin Karki, Global Lead, Hydropower and Dams, World Bank; Arturo Alarcón, Senior Energy Specialist, Inter-American Development Bank; Maham Iftikar Warraich, Senior Investment Officer, IFC; Anders Cajus Pedersen, Chief, Regional Power Systems, African Development Bank; Paul O’Connor, Executive Director, Green Bonds, JP Morgan. Moderated by Gabriel Azevedo, Chief Environmental Social and Corporate Governance Division, IDB Invest.

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