Supporting Hydropower : An
Overview of the World Bank Group's Engagement

Hydropower development makes an
essential contribution to reducing poverty, boosting shared
prosperity, and improving sustainability. Water storage
associated with some hydropower projects can also make
important contributions to water and food security and to
climate resilience. The World Bank Group (WBG) thus uses
multiple instruments to support sustainable and responsible
hydropower projects of various sizes and types, depending on
local need. But hydropower can also carry significant risks
that must be carefully managed. Supporting sustainable
hydropower is important for the World Bank Group, because
hydropower potential exists where electricity is most
needed. Hydropower production is the least-cost method of
providing electricity in many developing countries. The WBG
is committed to helping its clients continuously improve the
way they approach hydropower so as to better manage its
risks and better share the benefits of this renewable
resource. Support for hydropower helps manage risks and can
yield local, national, regional, and global benefits.
Sustainable hydropower has three dimensions: physical,
financial, and social/environmental. While a large amount of
progress has been made on sustainability, particularly over
the last decade, new challenges continue to emerge or become
more pressing. These include: 1) securing multiple benefits
from investments in hydropower; 2) managing cascades of
projects to optimize additional benefits or to prevent
exacerbating negative impacts; and 3) developing a more
sophisticated understanding of land and water interactions.