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Climate Bonds Calls For Hydropower Technical Working Group



Climate Bonds has convened a Hydropower Technical Working Group (TWG) to assess and develop criteria for climate friendly investments in hydropower.

The aim is to develop criteria that can identify and monitor hydropower investments which deliver climate mitigation benefits and/or incorporate adaptation and resilience impacts, whilst screening out those that don’t meet these objectives.

The Criteria are intended to provide a screening tool for both investors and issuers to determine whether bonds linked to hydropower assets can be considered consistent with limiting warming to a global average of 2°C.  They will provide a path for certifying green bonds in the sector, under the Climate Bonds Standard and Certification Scheme.

The Hydro Technical Working Group (HTWG) brings together a host of industry, environmental, technical and water experts drawn from international NGOs, government and academia. The TWG will be taking a robust science-based approach, one that looks at verifiable targets and metrics and takes into account in its analysis and assessment processes the environmental and social challenges that face some hydro developments.

Once developed, Draft Criteria will then be opened for public and industry stakeholder consultation. Feedback will be reviewed before being submitted to the Climate Bonds Standard Board for consideration.

Sean Kidney, CEO, Climate Bonds Initiative said, “the convening of this Marine Technical Working Group represents another stage in developing rigorous science based foundations for climate finance. The Working Group will help ensure the many issues around hydropower are closely examined, relevant science is considered and draft standards draw out specific climate-focused reporting and monitoring requirements for hydropower bonds and fully leverage existing guidance.”

Richard M. Taylor, F.E.I. Chief Executive Officer, International Hydropower Association claimed that, “climate change can only be managed once we have developed tools for increasing investment in climate-aligned infrastructure. Specific criteria for the screening of climate-compatible hydropower will be essential for bond issuers and investors to move forward with confidence.”

Building on existing guidance and protocols, the Climate Bonds Standard is a crucial step forward in this process.

David Harrison, Senior Advisor and Consultant, Great Rivers Partnership, TNC added, “from an environmental perspective, it is right to be cautious about hydropower. However, the reality is that hydropower will play an important role in the transition to a low carbon economy; it’s the most established renewable source and has significant energy storage potential, enabling much greater development of wind and solar. Given this, and the prospect of further large-scale hydro development particularly in developing countries, the TWG’s task of science-based eligibility criteria for the inclusion of hydropower in green bonds is critical.”


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