International Practices on Foreign Investment in Hydropower

Santosh Giri, 7/20/2014

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Below are most recent international practices of foreign investment in hydropower, which must be thoroughly
analyzed before we jump into any conclusions:

FAST FACTS
1
:
Estimated hydropower potential 300,000 megawatts = US$ 600 billion potential market capitalization
More than 10500 rivers. Indian grid is located within a short distance of 50-150 kilometers from Nepals
electricity interconnection points. Hydrochina Corporation in partnership with IDS Energy is developing a 150
Megawatt hydropower project in Nepal which is located approximately 50 kilometers from the isolated Tibetan
grid of China. Therefore, the electricity generated from this project could also be exported into China.



Nation Foreign Investment in Hydropower
Myanmar
2
The hydropower potential of Myanmars four main rivers is estimated at 100,000 megawatts
(MW), less than 10% of which has been harnessed. The Myanmar Electric Power Ministry (EPM)
has earmarked a huge hydro potential of about 100,000 MW, out of which about 39,720 MW
has been identified for development including more than 200 hydro potential sites.
China
3
2 classifications large and medium (over 50 MW), and small sized hydropower (below 50 MW).
Foreign investment in hydropower in China has been a spotlight recently, because of stable
returns, low maintenance cost and preferential government policies.
Bhutan
4
Bhutan is looking at attracting more foreign investments and greater private participation in
expanding the country's hydro power sector. Tata Power, among others, is already working on
a hydel project in the neighboring nation. At present, many of the hydel projects being
developed in Bhutan are under an agreement between the two countries. The Indian
government has agreed to develop 10,000 MW of hydro power in Bhutan by 2020.
Under Indo-Bhutan co-operation, many hydel projects including 1,020 MW Tala plant are
already functioning.
Iceland
5
US Alcoa - Icelands largest hydropower plant, the 690 MW Krahnjkavirkjun
International Practices on Foreign Investment in Hydropower
Santosh Giri, 7/20/2014

Page 2 of 3 | Bibeksheel Nepali
Cambodia
6


A group of nongovernmental organizations from Southeast Asia recently teamed up to urge
China to immediately halt its construction of a hydroelectric dam in Cambodia -- another case
of local opposition to China's overseas energy investments. The project is set to be built in
Cambodia's Stung Treng province with a production capacity of 400 megawatts. Known as the
Lower Sesan II Dam, it is scheduled to launch resettlement and construction work this year,
with clearing for the dam's 130-square-mile reservoir already underway.
Lao People's
Democratic
Republic
(Lao PDR)
7

receiving Foreign Direct Investment (FDI) mainly in hydropower sector which comparing by
sector from the year of 2000-2010, hydropower sector accounted more than thirty three
percents of total FDI (MPI, Laos). Today, more than 70 hydropower projects are under
development [1] , and the electricity sector makes up an important part of the export industry
in Laos. Thus it has played an essential role in the rapid economic growth of Lao PDR.
Norway
8
No other industrialized country relies on hydropower for its own power generation as much as
Norway. Norwegian companies build hydropower dams around the world, including
controversial projects like the Theun Hinboun Dam in Laos. Also invested in Chile, Philippines,
Indonesia and Ethiopia
Vietnam
9
Vietnams total hydropower potential of about 17- 18000 MW is close to fully exploited. Power
generation capacity should be increased up to 28,000-35,000 MW by 2020
Pakistan
10
Chinese investment company Sino-Tia-Cheng Group has offered investment in hydropower
schemes in Khyber Pakhtunkhwa, specially in power houses projects of Shozhosin (132MW) and
Sharmai (120MW) in Chitral.
Guyana
11
Guyana, the land of many waters, is rich in hydro resources and deserves to benefit from its
own natural wealth. The Amaila Hydropower Project will bring reliable, affordable electricity to
Guyana, spurring jobs and economic growth, while expanding the country's infrastructure. The
Amaila Hydropower Project is led by the Sithe Global Group, a leading U.S.-based international
energy company. Sithe Global's core management team has successfully developed or acquired
over 80 power plants in 10 countries totaling over 19,000 MWs of installed capacity.
Tajikistan
12


Tajikistan seeks foreign investment in hydropower, but snubs Russia. Over the last several
years, Russian companies seeking to exploit Tajikistans hydropower resources have not fared
well, drawing the ire of Emomali Rahmon himself. Russian companies were involved in the
construction of two sorely needed new hydroelectric power stations, the Sangtuda-1 and
Roghun projects. At present, Tajikistans hydroelectric power facilities have the capacity to
produce a maximum of only 16.5 billion kilowatt hours annually, although it is estimated that at
normal water levels, the countrys rivers have the potential to produce 300 billion kilowatt
hours per year.
Angola
13
Angola Announces Infrastructure Projects To Attract Foreign Investment. After Angola missed
its foreign investment target because spending on road and hydropower projects lagged
behind, the country has decided to invest in projects ranging from ports to airports to lure
greater funding, according to Angolas investment agency said. Angola is expected to attract $4
billion a year in non-oil international investments by 2017
Zimbabwe
14
Zimbabwe starts paying Zambia debt to enable hydropower project. Joint venture to produce
1,600 MW. The two southern African countries have started preliminary work on the Batoka
power project, estimated to cost $2.5 billion, and expected to be built and operated by a
private company for a period of years before transferring ownership to the two states.
Kyrgyzstan
15
Subsidized Energy Deters Investment in Renewable



International Practices on Foreign Investment in Hydropower
Santosh Giri, 7/20/2014

Page 3 of 3 | Bibeksheel Nepali
A Must Read"
Foreign Investment in the Energy Sector, Balancing Private and Public Interests, Eric De Brabandere, Leiden
University, and Tarcisio Gazzini, VU University Amsterdam
16


1
http://www.boaoreview.com/Opinions/Business/20131209/317.html
2
http://www.myanmarenergyinvestmentsummit.com/
3
http://www.chinalawandpractice.com/Article/2596158/Channel/7576/Legal-regulatory-framework-of-investment-in-
Chinas-hydropower-projects.html
4
http://www.business-standard.com/article/economy-policy/bhutan-seeks-more-foreign-investments-in-hydro-
power-sector-113090200884_1.html
5
http://askjaenergy.org/iceland-investing/foreign-investment/
6
http://www.eenews.net/stories/1060000986
7
http://www.ukessays.com/essays/economics/investment-policy-effect-on-fdi-in-
hydropower-sector-economics-essay.php#ixzz3857LRDrQ
8
http://www.internationalrivers.org/blogs/227-0
9
http://www.e-renewables.com/documents/Hydro/Hydropower%20in%20Vietnam.pdf
1010
http://www.nation.com.pk/business/10-Mar-2014/chinese-firm-to-invest-in-kp-hydropower-projects
1111
http://www.amailahydropower.com/About.cfm
12
http://www.bu.edu/phpbin/news-cms/news/?dept=732&id=49125
13
http://afkinsider.com/24113/angola-announces-infastructure-projects-attract-foreign-investment/
14
http://www.reuters.com/article/2013/02/19/zimbabwe-electricity-idUSL6N0BJ6PZ20130219
15
http://oilprice.com/Energy/Energy-General/Kyrgyzstan-Subsidised-Energy-Deters-Investment-in-Renewables.html
16
http://www.brill.com/products/book/foreign-investment-energy-sector