Publication: Financing of Private Hydropower Projects
Date
2000-07
ISSN
Published
2000-07
Author(s)
Head, Chris
Abstract
This study provides an overview of the
issues and challenges related to the private financing of
hydropower projects in developing countries. From the very
limited pool of projects that have already reached or are
nearing financial closure, ten have been chosen for the
study from five countries with the most active in promoting
private hydro development. Collectively the case study
projects provide a reasonable cross-section of private hydro
schemes that have been or are being developed. The financing
of greenfield private infrastructure on a limited-recourse
basis in developing countries faces certain common issues
irrespective of the type of project. However, hydropower
faces additional difficulties caused by the site-specific
nature of projects, high construction risk and long
construction periods, their capital-intensive nature with a
high proportion of local costs, unpredictable output subject
to river flows and broader water management constraints,
complex concession process to achieve transparency in the
award and pricing of output, and environmental
sensitivities. The study suggests the need for longer-term
financing to better suit hydropower characteristics, a
regulatory framework and realistic public-private
risk-sharing arrangements responsive to the requirements of
hydropower projects, and the careful preparation of projects
by the public sector to enable their formulation on an
adequate technical and contractual basis for development as
a private concession.
Citation
“Head, Chris. 2000. Financing of Private Hydropower Projects. World Bank Discussion Paper;No. 420. © Washington, DC: World Bank. http://openknowledge.worldbank.org/entities/publication/90829bf1-335b-5747-9c0c-6714cfd5ac0f License: CC BY 3.0 IGO.”
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