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Sharing hydropower's benefits with local communities

Benefit sharing considers the fair and equitable distribution of the costs and benefits of a hydropower project, writes Eduard Wojczynski, consultant at Manitoba Hydro International.

Hydropower project developers and operators are enhancing the sustainability of their projects and reducing project risks by improving the livelihood and quality of life for affected people compared to their pre-project situation.

Experience and research show that mitigation, compensation, and resettlement measures are often not sufficient to meet these sustainability and risk management goals, especially in the longer term. Benefit sharing with the local communities is also required. 

Manitoba Hydro International Ltd (MHI) along with the International Finance Corporation (IFC) will be presenting at a World Hydropower Congress workshop on the preliminary findings and guidance for a benefit sharing guide, which is being developed under contract with the IFC, in collaboration with IHA and the World Bank.

The purpose of the guide is to meet the demand from IFC clients, and the private sector more broadly, providing guidance on the evolving area of local benefit sharing in the hydropower context. The guide is primarily aimed at project planners, developers, owners, and operators who have limited experience in developing local benefit sharing programs. Financial institutions, NGOs, members of the public, and particularly communities affected by hydroelectric development might also find the guide beneficial.

For the purpose of this guide, benefit sharing is defined as the deliberate measures undertaken by hydropower developers to share benefits with local communities that go beyond the obligatory requirements related to compensation and mitigation measures.

The intent of the guide is to provide an illustration of a variety of benefit sharing approaches implemented in the hydropower sector globally, along with some high-level guidance on how projects might identify a model suitable to the circumstances of that project and implement that model. Examples of approaches used by various projects throughout the world are used to highlight various principles.

In addition to when governments and financial institutions require projects to share benefits, there is a wide range of objectives motivating private developers and operators to consider the voluntary inclusion of benefit sharing. A fair and equitable distribution of the costs and benefits of the project, social inclusion, long-term relationships with communities, and economic empowerment are important from the perspective of both the communities and the developer. Concurrently, social license and risk management aimed at managing project cost and schedule, as well as reputation and profitability are important to the developer. 

MHI provides innovative solutions to help our customers in the energy sector. As a subsidiary of one of Canada’s most highly regarded energy utilities, Manitoba Hydro, we are proud to bring over a century’s worth of utility best practice experience and our global expertise to every customer we serve. As a strong and diversified centre of innovation, MHI operates right across the electricity market — from generation, through transmission and distribution, to the end user. For over 30 years, we have provided leading-edge services and products to our clients in over 120 countries around the world.

Eduard Wojczynski will be presenting at the 2019 World Hydropower Congress workshop on benefit sharing and the focus session on indigenous communities.