Climate Bonds Initiative hopes to create standard for hydroelectric power bonds through new working group

Climate Bonds Initiative

Global financial advisory group Climate Bonds Initiative has launched a committee specifically focused on assessing and developing investments into the hydroelectric power sector.

Called the Hydropower Technical Working Group, Climate Bonds Initiative said, "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 those objectives."

The working group is charged with creating a "screening tool" to be used by investors to determine whether bonds linked to hydropower projects can be "considered consistent with limiting warming to a global average of 2-degrees Celsius," while also building the framework for a green bond certification process under the Climate Bonds Standard and Certification Scheme.

"Climate change can only be managed once we have developed tools for increasing investment in climate-aligned infrastructure," said Richard Taylor, CEO of the International Hydropower Association and member of the CBI working group. "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."

Taylor is joined in the working group by a number industry representatives and water resource stakeholders from around the world, including:

  • Mattia Celio, Program Manager, State Secretariat for Economic Affairs, Switzerland
  • Dr. James Dalton, Coordinator Global Water Initiatives, IUCN Global Water Programme
  • Jorge Gastelumendi, Senior Policy Advisor, TNC
  • David Harrison, Senior Advisor, Great Rivers Partnership TNC
  • Joerg Hartman, Independent Consultant
  • Cameron Ironside, Sustainability Director, International Hydropower Association
  • Helen Jackson, Environmental Economist, Climate Bonds Initiative
  • Oivind Johansen, Deputy Director, Norwegian Ministry of Petroleum and Energy
  • Pravin Karki, Senior Hydropower Specialist, World Bank Group
  • Christine Lins, Executive Secretary, REN21
  • Dr. John Matthews, Secretariat Coordinator, Alliance for Global Water Adaptation
  • Jian-hua Meng, Security Lead, World Wildlife Federation
  • Mike Muller, Commissioner, National Planning Commission, South Africa
  • Diego Rodriguez, Senior Economist, World Bank Group
  • Richard Roos-Collins, Chair, Low Impact Hydropower Institute
  • Jamie Skinner, Principle Researcher, International Institute for Environment and Development

CBI said it will use a "science-based approach" in a process that will be conducted in four phases: research and development, review, approval and finally, market implementation.

"We have seen a recent surge of inquiries regarding potential development of hydropower criteria under the Climate Bonds Standard," said CBI standards manager Anna Creed. "A distinct 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."

CBI defines hydropower using the Intergovernmental Panel on Climate Change (IPCC) standard, which includes run-of-river, reservoir and pumped-storage, but noted that in-stream technologies could be added as a fourth category.

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