27GW of new hydropower capacity was added last year. Record levels of hydropower deployment are observed in several countries, yet others fall short of their planned targets substantially. What are the drivers and barriers for implementation, and who are the investors? Public and private-sector players will share their views on the discrepancy of progress and explore ways to mitigate risks – actual or perceived.

1. Judith Plummer
University of Cambridge
Who's investing in hydropower ?
Presented at the
IHA 2013 World Congress

2. Who's investing in hydropower
What are the risks?

3. • We know that infrastructure
procured using a project
finance structure requires that
construction and operating
risk be managed through a
network of contracts
transferring most uncertainty
away….
• … Only high quality projects
and managers should be
found within [project finance]
structures that create such
self-imposed, high powered
incentives and discipline
mechanisms, while the rest of
infrastructure projects are
typically financed directly by
the public sector.

4. 0 5 10 15 20 25 30 35 40 45 50
Adversely affects upstream and downstream flow regime
Extensive resettlement issues
Cultural heritage issues
High hydrological variation
Contractual framework unclear/insufficient/ incomplete
Government poor reputation for timely responses
Adversely affects biodiversity
Complex project
Land and water use conflicts
Lack of developer/operator/ EPC contractor experience
International objections on social, environmental or cultural grounds
Areas subject to political change
Poor off-taker credit worthiness, including undue risk of non-payment
Area has reputation for corruption
Project creates trans-boundary Issues
Lack of strong regulatory environment
Poor developer/operator/ EPC contractor reputation
Power purchase agreement overly risky in nature
Project includes multi-purpose aspects
Adversely affects fish habitats
History of project delays or false starts
Likely adverse siltation issues
High inflation
No open access to electricity market
No financing assistance available from Government
Public health and safety concerns
Adversely affects wetlands
Areas of most concern: -

5. 0 5
Adversely affects upstream and downstream flow regime
Extensive resettlement issues
Cultural heritage issues
High hydrological variation
Contractual framework unclear/insufficient/ incomplete
Government poor reputation for timely responses
Adversely affects biodiversity
Complex project
Land and water use conflicts
Lack of developer/operator/ EPC contractor experience
International objections on social, environmental or…
Areas subject to political change
Low
Areas of most concern: -
Least concern – access to carbon finance

6. Biodiversity
Resettlement
Upstream/
Downstream
Flow
Hydrology
Government
Response time
Contractual
terms
Highest concerns: -
Cultural
Heritage

7. Technical
Institutional
Financial
Political
Social
Environmental
Ranking of areas of concern

8. Technical
Institutional
Financial
Political
Social
Environmental
Other
Organisation
Financier
Developer
Service Provider
Equipment
Supplier
Areas of
Concern

9. Technical
Institutional
Financial
Political
Social
Environmental
Pre-Project Viewpoint
Pre-Construction Viewpoint
Comparison of pre-project and pre-construction developer viewpoints

10. Summary
• Wide range of areas of concern
– Vary with project, country, size of system
– Vary slightly according to viewpoint
• Significant change in levels of concern later in
project preparation
– Depending on degree of mitigation possible
• Doubtful distinction between risk and
perception of risk