Best practices for sustainable development of micro hydro power in developing countries

This report synthesises the experience of micro hydro developments in Sri Lanka, Peru, Nepal, Zimbabwe and Mozambique and attempts to draw out the Best Practice from this experience.

The report provides a rigorous comparative micro economic analysis of the cost and financial returns of a sample of plants across the five countries. It draws out the macro economic, financial and other institutional arrangements that appear important to the scaling-up of micro hydro investments. The case study material maximises the opportunities for valid comparisons between the countries. Summaries of the micro economic analysis of the case studies of individual micro hydro plants are included in the annex to this synthesis report.

Key Findings:

• micro hydro technology is now a mature technology that has benefited from substantial improvements over the past 30 years. However, it remains relatively ‘unfashionable’ and to some extent has been neglected by both major funding programmes and governments
• the data shows that in certain circumstances micro hydro can be more appropriate and profitable than other energy supply options, and therefore should be treated as part of the ‘full menu’ of energy options to be considered in meeting the needs of rural people
• investment in micro hydro has occurred in three broad phases:
  • a technological phase to improve and demonstrate the viability of the technology
  • a social phase where the objectives are largely to meet the needs of rural people in just the same way that investments have been made in health centres and feeder roads
  • a financial phase, where the emphasis is on financially sustainable micro hydro investments
• The successes and failures attributed to micro hydro programmes have been confused as a result of the multiple and wide-ranging objectives set for such programmes. These objectives range from the maximisation of micro hydro regardless of income or need, to providing rural people with electric light because of its social impact and sense of belonging to the modern world, to providing energy that can assist in securing the livelihoods of marginalised

Recommendations are made for best practice are made for governments, donors, project developers, capacity building and for the management of hydro plants.