Finance and preparation

To meet global climate and sustainability goals, a major effort is needed to mobilise public and private sector investment in renewable technologies such as hydropower.

While a mature technology, securing favourable financing arrangements for hydropower development can be a challenging task, which needs to be specifically tailored for each project.

Developers are often faced with high upfront costs, rigorous and complex project preparation, environmental and social considerations, and services which are not adequately remunerated.

Our action

IHA is working across several fronts together with developers, investors, international financial institutions and NGOs to help mitigate the economic risks of hydropower development and unlock greater investment.

Through the promotion of the Hydropower Sustainability Tools and as part of the Climate Bond Initiative’s technical working group, we have contributed to the development of proposed hydropower eligibility criteria for climate financing for the growing green bond market.

We are also collaborating with international partners on the role of project preparation facilities and the policy and market changes needed to fully reflect hydropower’s contribution to evolving electricity systems.

In 2019, a new IHA study on project ownership study offered insights on the level of private sector involvement in hydropower. The study also analysed how a project’s size impacts its ownership model and the role of foreign direct investment.