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The Geopolitics of Hydropower Dams

Genevieve Donnellon-May | Climate Fellow

Hydroelectric power is one of the world’s most abundant and cheapest renewable electricity sources. In both developed and developing countries, hydropower dams are constructed to boost economic development and better manage existing water resources. Importantly, hydropower also improves accessibility and reduces the cost of electricity to consumers.

Despite the benefits, critics have pointed out the devastating impacts of dams on the environment, along with the associated geopolitics surrounding the financing of large dams.

Social and environmental impacts

The significant environmental and ecological impacts of operating hydropower dams are well-established. Large-scale dams, in particular, are linked to biodiversity loss, soil erosion, displacement of local residents, and destruction of forests and wildlife habitation.

Hydropower dams are also linked to violent conflict. For instance, plans to construct the Hatgyi Dam along the Salween River in the middle of a civil war zone in the state of Karen, Myanmar, resulted in violence between the Myanmar Army and the rebel independence group, the Karen National Union. Consequently, 3,500 Karin villagers fled across the Thai border, while the increased militarisation of the dam site has increased conflict.

Governments and other stakeholders have also been known to repress and criminalise environmental activists and local protestors, particularly indigenous groups. As the United States Institute of Peace (USIP) recently noted, activists from the Philippines to Brazil have been jailed, kidnapped, and murdered because of their opposition to hydropower projects.

Financing of hydropower dams

The financing of hydropower dams has also come under scrutiny. Much of this can be traced back to the 20th century, when countries financed international infrastructure projects, including dams, mainly due to geopolitical and geo-strategic reasons. During the Cold War, the US and the Soviet Union financed dam-building and related infrastructure projects worldwide to expand their spheres of influence. In Afghanistan, for instance, both countries were involved in infrastructure building; while the Soviet Union built the Salang Tunnel, the US constructed the Helmand Valley project.

More recently, Chinese companies have become the pre-eminent global players in major dam projects and increasingly important financier of energy infrastructure development in the Global South, usually supported by Chinese state finance. From Asia to Africa, Chinese hydropower investment and financing have been criticised for environmental and hydrosocial impacts. For instance, Chinese government-backed companies and banks are working with the government of Guinea to construct the Souapiti hydroelectric dam on the Konkouré river. However, the dam is displacing around 16,000 people and 253 square kilometres of land, according to Human Rights Watch.

Dams and geopolitical concerns

Hydropower dams can exacerbate water scarcity fears and the potential for conflict over shared water resources between upstream and downstream countries.

In Asia, hydropower capacity in the region grew from nearly 16-gigawatts (GW) to 44 GW between 2000 and 2016. Similarly, one of the biggest contributors to this increase is Chinese infrastructure projects. Given that many of China’s hydropower dams are located in Tibet on the upstream of transnational rivers like the Mekong, downstream countries have raised alarm due to potential geopolitical and hydropolitical repercussions. As Tibet is the origin of the headwaters of most of Asia’s major rivers, China could use it to “turn off the tap”, reducing or entirely halting the water flow to downstream countries.

Other countries have also received criticism for their hydropower ambitions, like India, whose dam projects have alarmed its neighbours. New Delhi’s USD$1.18 billion Pakal Dul hydropower facility, expected to be completed in 2023, is built on the Marusudar river, the largest tributary of the transboundary Chenab River, which crosses from India into Pakistan. Observers suggest that the hydropower facility will improve India’s energy security while reducing Pakistan’s ability to build similar facilities on its side of the border.

Looking ahead

With more than 3,700 dams planned or in construction worldwide—most in developing countries—governments are grappling with rapidly increasing electricity demand, particularly for the 800 million people in fragile states, where opposition to large hydropower dams could turn into much larger social justice movements.

To support decision-making on hydropower projects and prevent related conflicts, countries should follow the World Commission on Dams' recommendations. In addition, countries must engage transparently with local stakeholders to ensure free and informed consent is received — including from communities residing downstream that will be affected by the dam.

Furthermore, countries could follow the USIP’s suggestion of building smaller sustainable and equitable development projects like smaller run-of-the-mill and micro-hydropower dams on rivers . As Pakistan, the Dominican Republic, and Southeast Asia have shown, small-scale hydropower can sustainably help meet local energy needs and support the development of local industry.

Challenges remain ahead for the future of hydropower. The impact of the bifurcation of the global system remains to be seen, with the West on one side, and Russia and China on the other. Will foreign powers continue to play a role in the financing of mega hydro-infrastructure projects in the rest of the century? What does this mean for India, another rising power with significant domestic hydropower ambitions? Will a country’s ability of to receive financing for hydropower projects depend on who it supports on the international stage?

Whatever the case may be, for developing countries reliant on hydropower for energy supply and economic growth, it seems very much a case of “dammed if we do, damned if we don’t.”

Genevieve Donnellon-May is the Climate Fellow for Young Australians in International Affairs.


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