Alec Bernstein attended a workshop convened by the International Hydropower Conference, the World Bank, and the Nordic Development Bank on Hydrologic Risk in Hydropower Dominated Energy Systems in London, UK on November 30th through December 1st. The workshop’s geographic focus was Africa and the main objectives of this training were: (i) to present and discuss the best practices and the new trends internationally adopted in the management of the hydrologic risk in hydropower generation and (ii) inform the representatives from the African countries, potentially exposed, about the suitable mitigation measures and the available hedging mechanisms.
Although we have been seeing more and more hydro-financial risk mitigation strategies being prepared around the world, we have observed very little progress in Africa where a large potential for operations of this kind is available, including vast opportunities for private sector engagement. A lot of work on climate change assessment and resilience analysis on African hydropower projects has been carried out so far but very few transactions to mitigate the financial risk from hydrologic variability have been really undertaken in Africa.
The workshop provided a great opportunity to learn from private practitioners and public organizations on hydropower insurance schemes for mitigating risk in the African context. There were representatives from several African river basin organizations, hydropower authorities as well as the UK Met office, Private insurance companies and consulting firms. There were also some other academic institutions present. The workshop was productive for the HRG as the group continues working on a climate risk assessment on the Batoka Gorge HES in the Zambezi River in Southern Africa. Several examples of insurance schemes and payout strategies were presented, and Alec presented the Decision Scaling approach to performing climate risk assessments on hydropower designs – Freshwater Resilience by Design.