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Judith PlummerUniversity of CambridgeWhos investing in hydropower ?Presented at theIHA 2013 World Congress
Whos investing in hydropowerWhat are the risks?
• We know that infrastructureprocured using a projectfinance structure requires thatconstruction and operatingrisk be mana...
0 5 10 15 20 25 30 35 40 45 50Adversely affects upstream and downstream flow regimeExtensive resettlement issuesCultural h...
0 5Adversely affects upstream and downstream flow regimeExtensive resettlement issuesCultural heritage issuesHigh hydrolog...
BiodiversityResettlementUpstream/DownstreamFlowHydrologyGovernmentResponse timeContractualtermsHighest concerns: -Cultural...
TechnicalInstitutionalFinancialPoliticalSocialEnvironmentalRanking of areas of concern
TechnicalInstitutionalFinancialPoliticalSocialEnvironmentalOtherOrganisationFinancierDeveloperService ProviderEquipmentSup...
TechnicalInstitutionalFinancialPoliticalSocialEnvironmentalPre-Project ViewpointPre-Construction ViewpointComparison of pr...
Summary• Wide range of areas of concern– Vary with project, country, size of system– Vary slightly according to viewpoint•...
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IHA 2013 World Congress: Judith Plummer: Who’s investing in hydropower?

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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.

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Transcript of "IHA 2013 World Congress: Judith Plummer: Who’s investing in hydropower?"

  1. 1. Judith PlummerUniversity of CambridgeWhos investing in hydropower ?Presented at theIHA 2013 World Congress
  2. 2. Whos investing in hydropowerWhat are the risks?
  3. 3. • We know that infrastructureprocured using a projectfinance structure requires thatconstruction and operatingrisk be managed through anetwork of contractstransferring most uncertaintyaway….• … Only high quality projectsand managers should befound within [project finance]structures that create suchself-imposed, high poweredincentives and disciplinemechanisms, while the rest ofinfrastructure projects aretypically financed directly bythe public sector.
  4. 4. 0 5 10 15 20 25 30 35 40 45 50Adversely affects upstream and downstream flow regimeExtensive resettlement issuesCultural heritage issuesHigh hydrological variationContractual framework unclear/insufficient/ incompleteGovernment poor reputation for timely responsesAdversely affects biodiversityComplex projectLand and water use conflictsLack of developer/operator/ EPC contractor experienceInternational objections on social, environmental or cultural groundsAreas subject to political changePoor off-taker credit worthiness, including undue risk of non-paymentArea has reputation for corruptionProject creates trans-boundary IssuesLack of strong regulatory environmentPoor developer/operator/ EPC contractor reputationPower purchase agreement overly risky in natureProject includes multi-purpose aspectsAdversely affects fish habitatsHistory of project delays or false startsLikely adverse siltation issuesHigh inflationNo open access to electricity marketNo financing assistance available from GovernmentPublic health and safety concernsAdversely affects wetlandsAreas of most concern: -
  5. 5. 0 5Adversely affects upstream and downstream flow regimeExtensive resettlement issuesCultural heritage issuesHigh hydrological variationContractual framework unclear/insufficient/ incompleteGovernment poor reputation for timely responsesAdversely affects biodiversityComplex projectLand and water use conflictsLack of developer/operator/ EPC contractor experienceInternational objections on social, environmental or…Areas subject to political changeLowAreas of most concern: -Least concern – access to carbon finance
  6. 6. BiodiversityResettlementUpstream/DownstreamFlowHydrologyGovernmentResponse timeContractualtermsHighest concerns: -CulturalHeritage
  7. 7. TechnicalInstitutionalFinancialPoliticalSocialEnvironmentalRanking of areas of concern
  8. 8. TechnicalInstitutionalFinancialPoliticalSocialEnvironmentalOtherOrganisationFinancierDeveloperService ProviderEquipmentSupplierAreas ofConcern
  9. 9. TechnicalInstitutionalFinancialPoliticalSocialEnvironmentalPre-Project ViewpointPre-Construction ViewpointComparison of pre-project and pre-construction developer viewpoints
  10. 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 inproject preparation– Depending on degree of mitigation possible• Doubtful distinction between risk andperception of risk

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