The International Hydropower Association is participating in the Climate Bonds Initiative’s Hydropower Technical Working Group.
The International Hydropower Association (IHA) is joining representatives of various international NGOs, governments and academic institutes on a Hydropower Technical Working Group which has been launched by the Climate Bonds Initiative. 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. Furthermore, the criteria will take a robust science-based approach 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 as set out in the COP21 Paris Agreement. They will provide a potential path for certifying green bonds in the sector, under the Climate Bonds Standard and Certification Scheme.
Richard Taylor, IHA’s Chief Executive, said: “Climate change can only be managed once we have developed tools for increasing investment in climate-aligned infrastructure. Building on existing guidance and protocols, the Climate Bond Standard is a crucial step forward in this process. Specific criteria for the screening of climate-compatible hydropower will be essential for bond issuers and investors to move forward with confidence."
Sean Kidney, CEO of the Climate Bonds Initiative, said: “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.”
The Technical Working Group brings together a host of industry, environmental, technical and water experts. The processes will be conducted through regular meetings and bilateral consultations, organised around evolving draft documents. 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. An initial meeting was held on 21 June 2016.
Anna Creed, Standards Manager at the Climate Bonds Initiative, says: “We have seen a recent surge of inquiries regarding potential development of Hydropower Criteria under the Climate Bonds Standard, and it’s a positive that the technical working group process is now underway.”
She goes on to add that the work of the Hydropower TWG will build on both existing hydropower protocols and the previous work of the Climate Bonds Initiative Water Expert Group. The water group has previously developed criteria to identify grey water investments that deliver climate mitigation benefits and/ or incorporate adaptation and resilience impacts. Hydropower was initially a sub-sector under consideration by this group, but given both the complexities and sensitivities of hydropower investments ,Creed said the decision was taken to address it under a separate expert group.
David Harrison is a Senior Advisor and Consultant at the Great Rivers Partnership, which is also a member of the working group. "From an environmental perspective,” he says, “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."
The Climate Bonds Initiative is an international, investor-focused not-for-profit organisation working solely on mobilising the US$100 trillion bond market for climate change solutions. www.climatebonds.net