Large hydropower projects have sold poor people and the environment down the river. They are usually built to provide benefits to urban middle classes and industrial centers rather than the poor, have serious environmental impacts, and are not resilient to climate change. In spite of their bad track record, the World Bank wants to increase lending for large dams in its new Energy Strategy.

The new Energy Strategy will be discussed by the Bank’s Board members in April 2011. It will guide the future lending priorities of the most important international financier in the energy sector.

The new Energy Strategy, which was leaked to the public in March 2011, states that the World Bank will no longer fund coal projects in middle-income countries. It will continue to fund oil and gas projects, and coal projects in poor countries. Most importantly, the strategy proposes to increase Bank lending for large, centralized hydropower projects that “can take advantage of economies of scale.” Its main focus is on large hydropower projects in Africa.

World Bank Energy Strategy Graph In a critique and a press release, International Rivers has called the new strategy a lose-lose approach. Sinking billions of dollars into centralized projects will not make countries resilient to unpredictable rainfalls under climate change.

Big projects don’t typically reach the rural poor, and are adding further pressure on freshwater ecosystems which are already reeling under climate change. In comparison, decentralized renewable energy projects such as wind, solar and small hydro could strengthen resilience and reduce energy poverty, without further degrading fragile ecosystems.

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