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18 May 2020

In an unprecedented joint statement, 16 international and national organisations representing the global hydropower sector today set out guiding principles for energy infrastructure policy in the Covid-19 recovery.



The organisations represent hydropower developers, operators, manufacturers, researchers and innovators including the world’s largest hydropower producers in China, the United States, Canada and Russia, among other countries.

Their statement, coordinated by the International Hydropower Association (IHA), sets out how the coronavirus pandemic has demonstrated hydropower’s resilience and critical role in delivering power and water supplies to communities, industry and essential services.

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Widespread uncertainty and liquidity shortages have however put financing and refinancing of many hydropower projects at risk. In some regions, new and upgrade projects have also been halted, contributing to a fall in confidence regarding future investments and operations.

The 16 organisations call on policy-makers to recognise hydropower’s vital importance to the clean energy transition, due to the unique services it provides to integrate and support variable renewables such as solar and wind.

“As the single largest source of renewable electricity with unique flexibility services to support the integration of variable renewable energy, hydropower will be vital to the future energy system. All countries that have achieved 100 per cent renewable electricity have relied heavily on hydropower.

“Furthermore, hydropower delivers vital means of managing freshwater, providing supplies for agriculture, homes and businesses, and mitigating the impacts of extreme weather events such as floods and drought.

“Yet hydropower’s contribution in maintaining system reliability has not been properly recognised, incentivised by policy makers or appropriately valued by the market," the statement reads.

The hydropower and generator associations set out the following principles for green and resilient infrastructure stimulus packages as they call on decision-makers to build more sustainable hydropower projects:

Call to action:

  • Ensure the recovery facilitates the development of sustainable hydropower projects as an essential part of the energy transition and wider development strategy to help kick-start our global economy. This should include modernisation and rehabilitation projects.
  • Focus on sustainable hydropower development to ensure that economically viable and shovel-ready projects can commence.
  • Where possible and within reason, fast-track planning approvals to ensure the development and modernisation of hydropower projects can commence as soon as possible to help stimulate the economy.
  • In regions where this applies, extend any construction deadlines for hydropower projects that have previously benefited from government programmes to secure the finance already committed.
  • Given the increasing need for long-duration energy storage such as pumped storage, work with regulators and system operators to develop appropriate compensation mechanisms that recognise and value all the attributes hydropower provides to the grid.
  • Not only maintain but increase the ambition of renewable energy and climate change targets which incorporate the role of sustainable hydropower development. This will instil much needed confidence in the sector.

The 16 organisations in addition stress the importance of all projects adopting good environmental, social and governance practices in line with the internationally recognised Hydropower Sustainability Tools.

Signatory organisations:



International Hydropower Association (IHA)


WaterPower Canada


China Society for Hydropower Engineering




Indonesia Hydropower Association


Small Hydropower Plants Association of the Kyrgyz Republic


Mexican Association of Hydroelectricity


Small Hydropower Association Mongolia


Energy Norway


International Centre for Hydropower (ICH)


Polish Hydropower Association / TEW


Polish Association for Small Hydropower Development


Association "Hydropower of Russia"


Hydro Power Association of Uganda

United Kingdom

British Hydropower Association


National Hydropower Association (NHA)

Read the statement in full (pdf).

7 May 2020

Good practice guidance seeks Indigenous communities’ free, prior and informed consent for hydropower development

New sustainability guidance will give increased confidence to local communities, industry and investors that hydropower projects can be successfully developed while respecting Indigenous People’s lands, rights and culture.


An Indigenous Peoples prayer ceremony at Nepal's UT-1 hydropower project


The Hydropower Sustainability Assessment Council, a multi-stakeholder group of social and environmental NGOs, industry, government and financial institutions, released the guidance as amendments to its Hydropower Sustainability Tools, which are used to assess and rate project performance. 

‘A bridge of faith’

Projects which achieve the Free, Prior and Informed Consent (FPIC) of affected Indigenous People will now be recognised as meeting international good practice in sustainable hydropower development. FPIC is a principle recognised in the UN Declaration on the Rights of Indigenous Peoples and is a condition of performance standards issued by the World Bank and International Finance Corporation.

Phurpa Tamang is an Indigenous People’s advocate who advised on the guidance as part of a specially appointed working group which included representatives of civil society and business. “Gaining consent is important because Indigenous People cannot be separated from natural resources due to religious, spiritual and cultural reasons and for livelihoods,” he said.

Phurpa helped facilitate a community consultation with Nepal’s Upper Trishuli-1 (UT-1) hydropower project, which successfully achieved the Free, Prior and Informed Consent of the affected Indigenous communities. “The FPIC process developed a bridge of faith and belief between developers and locals and became a kind of conflict management mechanism,” he said.

The new guidance updates language in the Hydropower Sustainability Tools’ Assessment Protocol and ESG Gap Analysis Tool, which previously required no major opposition instead of consent during stakeholder consultation.

To achieve good practice, a project will now need to demonstrate FPIC following the principle of proportionality with respect to the affected Indigenous Peoples’ rights at risk. Developers will also need to establish that good-faith consultation with Indigenous Peoples’ institutions has been carried out through a culturally appropriate, two-way process, with a mutually-agreed disputes procedure. 

Led by David Harrison, a water resources consultant and former board chairman of The Nature Conservancy, the working group reviewed existing safeguards and standards from international financial institutions and commissioned a study on international law.

“FPIC is not just an outcome, it is an on-going process of good faith consultation and negotiation,” Mr Harrison said. “The amendments help to make FPIC practical and effective. The first, the principle of proportionality, brings in a balancing between the degree of impacts and the rights of Indigenous People involved. The second is the increase of emphasis on the procedural aspects.”

Eddie Rich, CEO of the International Hydropower Association (IHA), said: “We know that community consultation, especially of Indigenous People, is one of the most important aspects of planning and developing any infrastructure project. This guidance will help developers and Indigenous People to work together, recognising their rights, livelihood and dignity, and will mean sustainable projects receive the investment they deserve.”

Juergen Schuol, Head of Sustainability at Voith Hydro, an international supplier of hydropower plant equipment, said: “With the FPIC amendments in the Hydropower Sustainability Tools we now have clarity on the extent of consultation and consent required. This is a significant step forward for hydropower companies, assessors and most importantly the local stakeholders, especially Indigenous Peoples.”

Greg Guldin from Cross-Cultural Consulting Services, who was engaged by the International Finance Corporation (IFC) to facilitate the FPIC process on Nepal’s UT-1 project, said: “The new FPIC agreement puts the hydropower sector on the frontlines of an emerging new partnership paradigm of engagement with Indigenous Peoples.

“Hydro projects can turn FPIC and Indigenous Peoples policies into veritable project bonuses by increasing the likelihood that local communities will feel engaged and ready to partner with projects over the long term.”

Further information:

The Hydropower Sustainability Assessment Council, which governs the Hydropower Sustainability Tools, includes representatives of social, community and environmental organisations, governments, commercial and development banks and the hydropower sector. The International Hydropower Association (IHA) acts as the council’s management entity and is responsible for overseeing training and accreditation.

The Hydropower Sustainability Tools define and measure sustainability in the hydropower sector. The amendments related to Indigenous Peoples have been made to the Hydropower Sustainability Assessment Protocol, which is used to assess projects against social, environmental and governance performance criteria, and the Hydropower Sustainability ESG Gap Analysis Tool, which identifies gaps against good practice.

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7 May 2020

In Nepal, the Tamang Indigenous People gave their free, prior and informed consent to a new 216 megawatt run-of-river project.

The River Trishuli flows down the steep Himalayas and enters Nepal with such force and speed that it was named after the trident of Lord Shiva, the most powerful of Hindu gods. Legend has it he drove his trident into the ground to create the source of the sacred river.


Tamang people consecrating FPIC agreements  - credit Gregory Guldin and NEFIN


The river’s immense hydropower potential has for long been recognised, but to date has remained untapped. This year the Nepal Water and Energy Development Company (NWEDC) however aims to begin construction on a 216 megawatt (MW) run-of-river project, the Upper Trishuli-1 (UT-1). 

Providing electricity for up to nine million people, the hydropower station is central to Nepal meeting its growing energy demands. The project was approved after successfully consulting with affected Indigenous Peoples and gaining their Free, Prior and Informed Consent (FPIC).

FPIC – ‘a give and take tool’

FPIC is a principle recognised in the UN Declaration on the Rights of Indigenous Peoples and is a condition of investment performance standards issued by the World Bank and International Finance Corporation (IFC).


Adibasi Janajati Advisory Council (translates to Indigenous Peoples Advisory Council) - credit Gregory Guldin and NEFIN


The US$453 million UT-1 project in Rasuwa district has implications for the area’s Indigenous Peoples, most of whom belong to the Tamang community. The project will affect almost 80 hectares of land.

One of the project’s lenders, IFC, employed Greg Guldin, an expert from Cross-Cultural Consulting Services to facilitate the process of achieving FPIC with the affected Indigenous People alongside Phurpa Tamang, an Indigenous People’s advocate and a project-affected person who was appointed by NWEDC.

According to Phurpa, the Tamang people have a deep connection to the Trishuli River and cannot be separated from it for religious, spiritual and cultural reasons. “When a project is in operation, our water, forest and land will be disrupted or lost,” he says. “But this can be mitigated through FPIC, a give-and-take tool for Indigenous Peoples by which we can make compromises with project developers and co-plan our future.”

Good faith negotiations

Under the community consultation process that was implemented, the Adibasi Janajati Advisory Council (AJAC) was created to support decision-making, consisting of 85 representatives from 10 villages.


CEO receives consecrated [FPIC] Consent Statement - credit Gregory Guldin and NEFIN

“The FPIC process required by the international financial institutions was initially met with a lot of scepticism by critics, who feared failure and said written and signed consent was nearly impossible,” said Greg. “But it was achieved in six months.”

The FPIC process was accomplished through good faith negotiations between the Indigenous Peoples organisations, the company’s management, and the project’s lenders, Greg says. “The more engaged the Indigenous Peoples felt, the less likely there were to be misunderstandings and conflicts.”
NWEDC went on to receive the signed consent of the AJAC from its chairman, a former critic of the project, on 2 November 2018.

The UT-1 project will deliver a benefits package for local communities including new infrastructure, such as roads, schools and health services. The local Tamang will also be offered share options, allowing them to become equity shareholders in the project. 

“UT-1 was started 12 years ago, but there were no signs of success and few local Tamang supported it.” Phurpa added. “With FPIC, a new door has opened for both the project and the Tamang community to achieve a ‘win-win’.”

Read more about Indigenous Peoples and FPIC.

Sustainability assessment tools have been enhanced to better align with ESG requirements set by international financial institutions such as IFC and the World Bank. 

Use of the Hydropower Sustainability Tools will mean hydropower developers better understand how their project can achieve the performance standards required by major investment banks for all types of infrastructure projects.  


The tools comprise the Hydropower Sustainability Assessment Protocol, which is used to assess projects against 26 social, environmental and governance performance areas, and the Hydropower Sustainability ESG Gap Analysis Tool, which identifies gaps against good practice and produces a gap management plan.  

Commissioning an independent assessment using these tools can help prepare project developers to meet lender requirements.

The tools offer a scoring framework specific to hydropower, and in some areas go beyond the requirements of international financial institutions by covering topics such as climate change and hydrological resource. 

“The tools can help high-performing projects demonstrate why they merit investment and ensure the best outcomes for the environment and local communities” said Eddie Rich, CEO of the International Hydropower Association (IHA). “At IHA, we encourage our members to sustainability test new projects and are pleased to offer training to strengthen institutional capacity on delivering good and best practice.” 

The changes include an update to assessment guidance on consultations with Indigenous Peoples, meaning projects will need to seek the Free, Prior and Informed Consent (FPIC) of affected Indigenous Peoples to achieve international good practice. This brings the assessment tools into line with IFC performance standards and the World Bank’s environmental and social standards. 

Other changes to the HESG relate to its structure and section titles. For example HESG section 4 is now titled Community Impacts and Infrastructure Safety, more closely relating the Word Bank’s ESS4 standard on Community Health and Safety. 

The tools are governed by the Hydropower Sustainability Assessment Council, whose members include representatives of organisations such as the World Bank, The Nature Conservancy, the International Union for Conservation of Nature, WWF, the Inter-American Development Corporation, hydropower companies and governments.   

The International Hydropower Association (IHA) acts as the council’s management secretariat and is responsible for overseeing training and assessor accreditation. 

To enquire about training or to identify an accredited assessor please contact

Download the assessment tools: 
Hydropower Sustainability Assessment Protocol
Hydropower Sustainability ESG Gap Analysis Tool

In May 2020, the Hydropower Sustainability Assessment Council updated the Hydropower Sustainability Tools, which are used by independent assessors to assess a hydropower project’s performance in accordance with internationally recognised good and best practices.

The changes include the addition of Free, Prior and Informed Consent (FPIC) as a requirement of meeting good practice for hydropower projects that affect Indigenous Peoples.



What is Free, Prior, Informed Consent (FPIC)?

FPIC is a principle enshrined in the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP), agreed and adopted by member governments on 13 September 2007. It establishes a ‘universal framework’ of minimum standards for the survival, dignity and well-being of the Indigenous Peoples of the world and it elaborates on existing human rights standards and fundamental freedoms as they apply to the specific situation of Indigenous Peoples.

What are the new requirements under the Hydropower Sustainability Tools?

To achieve good practice when seeking stakeholder support for a hydropower project, a project will need to show that FPIC has been achieved with respect to the Indigenous Peoples’ rights at risk following the principle of proportionality. To achieve best practice, in addition FPIC will need to be demonstrated for directly affected indigenous groups for the entire project.

A hydropower developer is expected to engage in good-faith consultation with Indigenous Peoples’ institutions of representation and decision-making, as determined by them. The engagement process shall be appropriately timed, culturally appropriate and two-way. In addition, ongoing processes need to be in place for Indigenous Peoples to raise issues and gain feedback, with a mutually-agreed disputes procedure.

The guidance on Indigenous Peoples has also been amended in relation to assessing the project-affected community, management and outcomes. See the guidance for full details.

How is FPIC defined in the Hydropower Sustainability Tools?

Free, Prior and Informed Consent is defined as both a process and an outcome. 

The process involves (i) good-faith consultation; (ii) mutual and cross- cultural understanding with dialogue that is ongoing and open, and gender and inter-generationally inclusive whenever possible (with gender and age disaggregated data and analysis); (iii) inclusive and participatory engagement, including during the assessment of issues and the identification of mitigation measures, with clarity on the level of participation of Indigenous Peoples throughout the consultation process; (iv) provision of adequate resources to ensure that the Indigenous Peoples representatives can participate in the FPIC process equitably, including the services of independent technical or legal consultants (such as Indigenous Peoples Organization); (v) mutual agreement on the process and desired outcome from the outset of the consultation; and (vi) documentation that is evaluated on an ongoing basis, is verifiable by a mutually agreed methodology, and made publicly available. 

The outcome is the agreement and the evidence thereof (including thorough documentation of how the agreement was achieved). Types of evidence include surveys, signatures on plans, records of meetings, video/ audio records, public hearing records, public statements, governmental license, court decisions, etc. Recollections of community elders cannot be accepted as evidence without supplementary forms acknowledged by and easily accessible to the counterparties to the agreements. FPIC does not require unanimity in the indigenous community and does not grant individuals or groups veto rights over a project. At the level of proven best practice, FPIC is to be achieved for the entire project, irrespective of the principle of proportionality.

How are Indigenous Peoples defined?

The term Indigenous Peoples refers to a distinct social and cultural group possessing the following characteristics in varying degrees: self-identification as members of a distinct indigenous cultural group and recognition of this identity by others; collective attachment to geographically distinct habitats or ancestral territories in the project area and to the natural resources in these habitats and territories; customary cultural, economic, social or political institutions that are separate from those of the dominant society or culture; an Indigenous language, often different from the official language of the country or part of the country within which they reside. In some countries, interactions with Indigenous Peoples may be required to be conducted through a specific government agency. 

What are Indigenous Peoples’ rights?

Indigenous Peoples’ rights are documented in places such as in the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) and the International Labour Organisation Convention No. 169. They include right to self- determination, right to ownership and property, right to practise and revitalise cultural traditions and customs, right to manifest, practise, develop and teach their spiritual and religious traditions, customs and ceremonies, right to the conservation and protection of the environment and the productive capacity of their lands or territories and resources. Indigenous Peoples’ rights are considered at risk when project activities or impacts prevent Indigenous Peoples from exercising their rights.

What does ‘good-faith consultation’ mean?

Good-faith consultation involves (i) willingness to engage in a process and availability to meet at reasonable times and frequency on the part of all parties; (ii) sharing of information that is accessible and understandable to the Indigenous Peoples, disseminated in a culturally-appropriate manner and in the local language(s)/dialect(s); (ii) commitment that Indigenous Peoples have been fully informed of project impacts affecting their rights; (iv) use of mutually acceptable procedures for negotiation; (v) willingness to change initial positions and modify offers where possible; and (vi) provision of sufficient time for the Indigenous Peoples to consider information using their customary internal processes.

What is the ‘principle of proportionality’?

The new guidance applies a principle of proportionality which stipulates that the extent of consultation and consent required is proportional to the nature and scope of the Indigenous rights that are impacted by the project. Ordinarily, consent will not be required for impacts that are not significant to Indigenous Peoples. However, good-faith consultation is required for this determination. Two situations, in which a project must obtain the consent of an indigenous community, are stated in the UN DRIP as follows: (i) when the project will result in the community’s relocation from its traditional territories, and (ii) in cases involving the storage or disposal of toxic waste within Indigenous lands.

Who issued the new sustainability guidance?

The amended guidance on FPIC was issued by the Hydropower Sustainability Assessment Council, a multi-stakeholder group of social and environmental NGOs, industry, government and financial institutions whose role is to develop guidelines and assessment tools for the hydropower sector. The decision-making committee of the council currently includes representatives from the World Wide Fund for Nature (WWF), the International Union for Conservation of Nature (IUCN), the Norwegian Agency for Development Cooperation (Norad), the Swiss State Secretariat for Economic Affairs (SECO), Energias de Portugal (EDP), Voith Hydro, the New Development Bank, the World Bank,the Women for Water Partnership, Sarawak Energy Berhad, the Office of Investment Board of the Government of Nepal and Hohai University, China.

Why was the guidance changed?

The Hydropower Sustainability Assessment Council gave a mandate to its executive committee to establish a working group, named the Hydropower Sustainability Working Group on Free, Prior and Informed Consent (FPIC-WG), to review good practice around hydropower activities affecting Indigenous communities. The objective was to find stronger agreement on the language that defines good international industry practice on this topic, and how this practice should be assessed at the project level. 

How was the new language decided?

The  FPIC-WG reviewed the current language on Indigenous Peoples in the Hydropower Sustainability Tools to determine whether any substantive changes were needed. It based its review on previous assessment case studies, analysis of existing standards and international law. In parallel, the working group evaluated the scope, relevance and applicability of current FPIC language in existing standards, including the Hydropower Sustainability Tools, the World Bank Environmental and Social Standard 7 (ESS7) and the IFC Performance Standard 7 (PS7). 

The FPIC-WG sought guidance from a former UN Special Rapporteur on the Rights of Indigenous Peoples to conduct legal research and analysis of applicable international law as to the duty to consult Indigenous Peoples, i.e. when and under what circumstances FPIC is required by international law, and how compliance with such requirements should be measured. The legal report, along with the assessment cases studies and the analysis of existing standards, provided the basis for the working group’s deliberation.

Following the approval of the good practice language, the council’s management entity and secretariat, hosted by the International Hydropower Association’s sustainability division, updated the best practice language and assessment guidance through collaboration with experienced accredited assessors and council members.