HydroAid: Effective Support for Energy and Development?

Access to energy is important for development, and energy has been high on the agenda of donors. Supporting hydropower development was seen as a key ingredient to ensure energy security in countries with such potential. However, increasing attention to the negative social and environmental impacts of dams contributed to curbing the enthusiasm for such projects on the part of international donors. Recently, however, climate change has caused a revival of interest in hydropower projects, which are regarded as "clean and green". In this project, we have studied Norwegian aid to energy development, particularly hydropower, in to key partner countries, Nepal and Tanzania. We have focused on how perspectives on what is considered the best practices in energy development have changed over time. Findings from the project indicate that in the early phases, aid to Nepal focused on bottom-up capacity development and small-scale projects, but that there was a marked shift in the early nineties towards emphasising more commercially-oriented projects and crafting legislative and institutional frameworks amenable to attract investors and facilitate export-oriented projects. In Tanzania, attention was mainly directed towards the building of infrastructure projects in the early days ? there was a much stronger presence of Norwegian actors in Tanzania as compared to Nepal. This presence gradually declined, and the emphasis shifted towards strengthening state institutional capacity in the energy sector. We find that the donor strategies in the two countries under study have taken quite different trajectories in the contexts of national and local priorities and realities, even though the principles guiding the point of departure were the same. Another finding is that the trend away from donor-recipient relationships towards more partnership-oriented modes of co-operation is quite strong in both countries. Further, private sector investments paly a much stronger role in Nepal than in Tanzania, and Nepal has a much stronger export-oriented focus. But Nepal also has good experiences with community-based and decentralised energy project options, and our project partner in Nepal is working to promote such models. In Tanzania, there has been less attention towards such models, among other things because the government has been focusing on expanding the national grid and strengthening state institutional capacity. The project has contributed to beneficial exchanges of experiences and mutual learning between the two countries.

Energy is perceived to be an important prerequisite for development, and is a top priority on the Norwegian aid agenda. Given the challenges of climate change, finding ways to support the creation of clean energy sources is a priority of much development assistance. Dams have been a much-favoured means of providing such energy in earlier times, but due to significant social and environmental impacts, donor funding dried up in the late 90s, and a multi-stakeholder platform, the World Commission on Dams (WC D) was convened to deliberate on how to deal with the hotly contested issues relating to dams and development, producing a report in 2000 that detailed principles that should be adhered to in hydropower projects. Due to the increasing concerns about clima te change, dams are currently experiencing a renaissance, and are being framed as one of the most climate-friendly low-carbon solutions to produce clean energy. The Norwegian Government is directing a major part of aid funds towards activities under the rubric of energy, climate and environment. The present project will explore how effective aid to support hydropower schemes has been in Tanzania and Nepal, focusing on the processes of aid negotiations, as well as the specific outcomes of hydropower devel opment. The key questions addressed include: How have the strategies of donors and recipient countries meshed with respect to hydropower development, and to what extent has aid to hydropower projects been carried out in accordance with the principles set out in the World Commission on Dams? Of particular interest will be how uncertainty with respect to climate change and associated trends in precipitation patterns and the trade-offs among multiple uses/users have been addressed, and what the benefits in t erms of access to energy have been.