Leveraging Private Sector Solutions in Large Hydropower Projects

Investment Rating - The report does not explicitly provide an investment rating for the hydropower industry Core Insights - Sustainably developed hydropower is essential for achieving climate and development goals, providing low-cost, low-carbon electricity and supporting the integration of variable renewable energy [18][29] - Significant investments are required to scale up hydropower capacity, with an estimated annual investment of $138 billion needed until 2050, while current investments average only $9.7 billion per year [19][30] - Private sector participation is primarily in small hydropower projects, with limited involvement in large projects, particularly in middle-income countries [20][38] Summary by Sections Executive Summary - Hydropower plays a crucial role in meeting electricity demand and achieving Sustainable Development Goal 7 by ensuring access to affordable, reliable, sustainable, and modern energy for all by 2030 [18][29] Private Sector Participation in Hydropower - Private sector involvement is concentrated in small-scale projects, with 70% of plants commissioned between 2000 and 2020 being privately owned, while public ownership accounts for over 70% of global installed capacity [20][38] - The private sector's focus is on greenfield projects, with limited engagement in brownfield projects due to regulatory uncertainties [20][42] Survey on Private Sector Participation - A survey of 23 stakeholders indicated a strong interest in hydropower development, particularly in small-scale, low-impact projects, but highlighted barriers such as regulatory uncertainty and high initial costs [21][22] Stakeholder Perspectives of Risks and Opportunities - Key risks identified include political change, environmental and social issues, technical challenges, and financial risks, which hinder private sector participation in large hydropower projects [22][67] Development Finance Institutions Role - Development Finance Institutions (DFIs) are crucial in creating a conducive environment for private sector participation, de-risking project preparation, and promoting innovative financing solutions [27][28]