Finance and investment
Despite the strong demand for clean energy and an abundance of capital available worldwide, securing favourable financing arrangements for hydropower development is a challenging and complex task, which needs to be specifically tailored for each project.
The reasons for this are multidimensional as financing is contingent on a variety of factors, such as hydrology, and environmental and social considerations, which impacts a project’s risk-reward profile.
Preparation facility model
A significant barrier to private sector investment in hydropower is the financial risk associated with rigorous and complex planning and assessments, with no certainty for investors that a project will be given permission to proceed.
We are promoting a new hydropower project preparation facility model, which could help investors, developers and governments get new projects off the ground, by ensuring that each one is selected according to recognised sustainability criteria and national and regional development needs. Read more.
An innovative new investment instrument, green bonds are fixed income loans for the finance and refinance of projects and assets that help address environmental and climate risks.
We are working with partners to agree recognised eligibility criteria for green bonds to fund hydropower projects. Read more.
Join the network
Members interested in contributing to the development of the Hydropower Preparation Facility concept or learning more about green bonds should join IHA’s Finance and Investment Knowledge Network. The network focuses on building and sharing knowledge on key trends and developments in hydropower financing.
Members can gain access to resources, case studies and webinars including:
- Briefing note: Hydropower and the development of the green bond market
- Slides from the ‘Innovation in hydropower financing’ workshop held in February 2018
- Slides and statistics on the latest trends and developments in hydropower financing
Latest associated content
Video: "This requires a real vision for the power system at a regional scale" – Jean-François Astolfi
Jean-François Astolfi, EDF vice-president, discusses hydropower and the difficulties faced by developing countries, ahead of the World Hydropower Congress in Beijing (19–21 May 2015).Type:Blog postDate:4 December 2014
An initiative in Uganda seeks to help agricultural development by encouraging the implementation of small hydropower projects that deliver electricity to farmers, agribusiness, and other customers in the area surrounding the powType:Blog postDate:21 November 2014
Junaid Ahmad is the senior director of the World Bank’s Global Water Practice. In this video interview, he spoke with us about the investment case for hydropower and the world in 2050.Type:Blog postDate:7 November 2014
Hydropower developer NuPlanet has begun construction of the 4.5 MW Stortemelk station near Clarence in the Free State Province, South Africa, after agreeing financing on the project.Type:News postDate:7 November 2014
Maria Van Der Hoeven is the executive director of the International Energy Agency.Type:Blog postDate:16 October 2014