Hydropower

Hydropower is one of the most reliable and long-lasting sources of electricity generation, with plants operating for over a century. Its flexible output can often be ramped up to meet demand or scaled back to store energy when supply exceeds demand, strengthening energy security.

At the same time, hydropower development is complex and can carry significant environmental, social, and economic risks if not properly managed. Projects can affect ecosystems, water availability, agricultural production, and cultural heritage, and may contribute to tensions over shared water resources. This underscores that hydropower is not a one-size-fits-all solution. It must be considered as part of a broader energy mix and requires rigorous assessment and sustained engagement across the full project lifecycle.

The World Bank Group is committed to helping countries harness the potential of hydropower responsibly, maximizing benefits for people and economies while protecting communities and the environment.

A Driver of Jobs and Economic Growth

Hydropower provides reliable electricity that enables job creation and economic development. The World Bank Group works with member governments to help ensure that hydropower projects expand access to affordable, dependable power that supports employment opportunities for communities—especially those closest to them.

Worldwide, hydropower investments generate more than 2.3 million direct jobs and enable broader economic opportunities through improved access to electricity, powering industries, food systems, and livelihoods. Reliable electricity—whether from hydropower or other sources—is what ultimately powers industries, strengthens food systems, and supports livelihoods.

Scale and Urgency

Hydropower now supports energy access for over 1 billion people worldwide. To meet rising demand and strengthen energy security, hydropower capacity needs to increase by 30 percent by 2035. This is particularly urgent in sub-Saharan Africa, where hundreds of millions of people still lack access to electricity. This is why Mission 300 offers a range of solutions, including hydropower, to help countries expand access to reliable, affordable energy.

Our Approach

The World Bank Group supports hydropower development as part of a broader portfolio of energy solutions that respond to each country’s development priorities and least-cost pathway. We help clients identify projects that appropriately balance costs, benefits, and risks while maintaining strong environmental and social performance, built on decades of operational experience. Success depends on early stakeholder engagement and tailoring approaches to the local context, legal frameworks, and active community participation. We support a range of hydropower projects from greenfield development to the rehabilitation and modernization of existing facilities, including dam safety.

In response to country demand, the World Bank Group provided $19 billion in hydropower financing between 2002 and 2025. For more than 60 years, the World Bank Group has worked with governments, technical agencies, donors, and civil society to foster sustainable transboundary water management and cooperation. Where appropriate, the World Bank Group works with governments and private partners to co-develop projects, share early-stage development risks, mobilize private capital, and provide debt, equity, guarantees, and blended finance.

Managing Risks Responsibly

We work closely with clients, local communities, and civil society to identify, assess, and mitigate environmental and social risks–or, where appropriate, to consider alternative energy options. All hydropower investments supported by the World Bank Group undergo climate risk assessments to evaluate performance under multiple future scenarios, including droughts and floods.

Projects financed by the World Bank Group must comply with its Environmental and Social Framework and, where applicable, the Sustainability Framework, which outline responsibilities for assessing and managing environmental and social risks and impacts. This includes those related to involuntary resettlement, Indigenous Peoples and Sub-Saharan African Historically Underserved Traditional Local Communities, labor and working conditions, biodiversity conservation, cultural heritage, and community health and safety, including dam safety. Additional requirements apply to projects with transboundary impacts. Stakeholder engagement and access to information is at the core of WBG environmental and social standards.

We promote transparency by publicly disclosing environmental and social assessments and ensuring access to grievance redress and independent accountability mechanisms, including the Grievance Redress Service, the Inspection Panel, the Office of the Compliance Advisor Ombudsman, and the Dispute Resolution Service. Meaningful consultation with local communities, civil society, and governments throughout the project lifecycle is central to our approach.