| Project finance Sustainable funding
Hydropower project developers and operators in over 40 countries can apply for funding to help finance an independent assessment of a project’s sustainability performance through the Hydropower Sustainability ESG Assessment Fund
THE HYDROPOWER SUSTAINABILITY ESG Assessment Fund is open for hydropower developers and operators to assess their environmental, social and government (ESG) performance. Up to 2024, the HESG fund will award a total of 1 million Swiss Francs (US$ 1.02m) to 40 or more hydropower projects across more than 40 countries in Africa, Asia, Europe and the Americas. The initiative is managed by IHAS and funded by the Swiss government’s State Secretariat for Economic Affairs (SECO).
What does the fund cover? Recipients will receive a grant to part sponsor the cost
of commissioning an independent project assessment using the Hydropower Sustainability ESG Gap Analysis Tool (HESG), one of the internationally recognised Hydropower Sustainability Tools, and can be used to support projects that seek certification. The grant will co-finance independent assessors,
who are accredited by IHA and the multi-stakeholder governance Council, to carry out an assessment using the HESG. The HESG assessments will be conducted in an official manner, according to the Hydropower. The key output of an HESG assessment is a final
report including an Environmental and Social Action Plan. The action plan identifies gaps against good practice and recommends actions to resolve the identified gaps in a proposed timeframe. The HESG assessment can be done during
preparation, implementation or operation stages of the hydropower project. The funding also covers preparation costs.
Who can apply? Projects under preparation and development, as well
as those already in operation, are all eligible for the grant. Applicants will need to demonstrate a strong track record or commitment to sustainability and show that their project aligns with national or regional development policies. The following countries are eligible to apply: Albania, Algeria, Armenia, Azerbaijan, Bangladesh, Bolivia, Bosnia-Herzegovina, Burundi, Cambodia, Colombia, Democratic Republic of Congo, Egypt, Ethiopia, Eswatini, Georgia, Ghana, Haiti, Honduras, Indonesia, Kenya, Kosovo, Kyrgyz Republic, Lao People’s Democratic Republic, Lesotho, Malawi, Moldova, Mongolia, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, North Macedonia, Pakistan, Peru, Rwanda, Serbia, South Africa, Tajikistan, Tanzania, Tunisia, Ukraine, Uzbekistan, Vietnam, Zambia and Zimbabwe. Proposals are selected according to the following
criteria: ● The project is located in a target country (listed above) – In order to maximise the outreach of
HESG assessments, a geographic diversification among the target countries shall be achieved in the selection of projects to be funded;
● The HESG assessment is official, according to the Hydropower Sustainability Council’s Terms & Conditions.
● Projects where the HESG assessment is intended to clear the way for access to climate/green bond financing with good chances to succeed and/or projects where the HESG assessment is intended to achieve certification against the Hydropower Sustainability Standard, provided they follow the harmonisation procedure will be given preference;
● The project sponsor demonstrates the need for the assessment through objectives that include, but may not be limited to: Enhance relationship and communication with stakeholders; Improve the socio-environmental management of the project; Increasing transparency and commitment to sustainability
● The project fits into national and/or regional policies and plans for hydropower project planning, implementation and operations;
● The project sponsor adopts a sustainability perspective to increase benefits to society;
● The project sponsor has a strong track record in and/or is openly committed to hydropower sustainability;
● The costing of the HESG assessment is supported by a detailed budget and a quote from an accredited assessor.
● Project installed capacity; ● Assessment readiness. ●
Hydropower Sustainability ESG Gap Analysis Tool The Hydropower Sustainability ESG Gap Analysis Tool (HESG) enables hydropower project proponents and investors to identify and address gaps against international good practice. The HESG is based on the
framework of the Hydropower Sustainability Assessment Protocol (HSAP). It assesses projects against the requirements of the HSAP’s environmental, social and governance topics. The tool provides an action plan to help project teams address any gaps against good practice. It is divided into 12 sections which are compatible with IFC’s Environmental and Social Performance Standards and the World Bank’s new Environmental and Social
More information To apply for the funding, please download the Call for Proposals at https://www.
hydrosustainability.org/ hesg-fund and submit your proposal by the deadline to sustainability@hydropower. org.
Framework. A key driver in the development of the HESG was the demand for an effective, lower cost alternative to a full HSAP assessment which is accessible for projects seeking eligibility for green or climate bond financing. The HESG was developed by International Hydropower Association (IHA) between February 2017 and June 2018 under the mandate of the Hydropower Sustainability Assessment Council, with the support of the Swiss State Secretariat for Economic Affairs (SECO).To ensure the highest quality and rigour in the assessment process, all commercial use of the HESG is carried out by accredited assessors.
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