Benefit Sharing in Hydropower

How can Mountain Communities Benefit from Hydropower Projects?

Mountains offer ideal conditions for the development of hydropower, but often, the uneven distribution of benefits emerging from project development can create friction and development disputes between mountain communities and project developers. How can hydropower projects be designed and implemented in such a way that affected mountain communities derive benefits beyond mere compensation and mitigation? Is there any evidence that benefits can be shared fairly and equitably with these communities? This is particularly important for Nepal, with an estimated technically and economically feasible hydropower potential of over 40,000 MW, of which only a fraction has been developed so far. This is also important for all the other countries of the HKH which have huge hydropower potential. Though a variety of interpretations exist, the term ‘benefit sharing’ references a new set of programmatic methods to reconcile the uneven incidence of costs and benefits resulting from hydropower development, an attempt to recognize the diverse claims of differently situated stakeholders, and a way of increasing long-term socioeconomic impact of hydropower development in the project area. As such, benefit sharing is often presented as ‘a core concept related to implementation of the principles of sustainability’—a vital and practical method for promoting cooperation, improved stakeholder engagement, and social and spatial equity. Benefit sharing has become an increasingly common theme in debates surrounding sustainable hydropower development and the management of water resources.

ICIMOD and its partner Niti Foundation have undertaken a study to understand the norms surrounding benefit sharing debates in Nepal and documented the various facets of benefit-sharing practices in Nepal. The report developed a comprehensive typology of the benefit-sharing mechanisms that have evolved in Nepal over the last four decades and critically analyzed each of these mechanisms in terms of what worked and what didn’t, and what can be done to fine tune these mechanisms to better suit mountain communities. A workshop was held on 27 and 28 June 2017, in Kathmandu, to disseminate these findings. 

Similar research on benefit sharing in hydropower has been initiated in India, Pakistan and Bhutan, and results are expected by early 2018. 

For more information, contact
Aditi Mukherji
Theme Leader, Water and Air