Clean and affordable energy is crucial to achieve a sustainable future. Despite being controversial, hydropower remains the predominant low-cost and reliable source of energy at global level, as it stabilizes the provision of electricity and it bears the power peaks without losing efficiency. However, hydropower requires huge upfront investments and patient functional capital. Under the Paris Agreement, countries committed to direct financial capital flows towards a low-emission pathway in order to enable the transition. Furthermore, private capital strongly engaged with a transition towards a climate-smart economy. The aim of this work is to study the investment system behind hydropower, investors’ behaviour and the optimal allocation of finance to favour the deployment of capital flows. We use Bloomberg Energy Finance database to track public–private investments over the past century (1903–2020). We use network models to represent the hydropower project financing landscape as a network of co-investments. We find that investors are highly localized, with continental players mostly interacting with counterparts in the same area of the world. Powerful exceptions are international organisations and multilateral banks which coinvest across the globe. They also tend to support low-income and fragile countries, meeting their mandate of sustainable development champions. Multilateral banks and international organisations are the most critical actors in enabling public–private co-investments; they activate partnerships with a wider diversity of investors within the network creating more opportunities for blended finance tools. Our results offer a novel perspective on finance for the energy transition: it challenges the idea that more capital invested is better and calls for a more efficient allocation of the available resources.



  • hydro investment
  • public–private partnerships
  • climate finance


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