Greening the Future: The Economic Benefits of Hydroelectricity for Developing Countries

In this article, we explore the economic advantages of hydroelectricity and how it can pave the way for a greener and more prosperous future for developing nations.

The Power of Hydroelectricity

Hydroelectricity is the conversion of water’s kinetic energy into electricity using turbines. It is considered a renewable energy source as it relies on the gravitational force of flowing water, which is continuously replenished by natural processes such as rainfall and snowmelt. The steady and reliable nature of hydroelectric power makes it an ideal option for both on-grid and off-grid electrification in developing countries.

Key advantages of hydroelectricity:

  • Abundance and availability: Water is a renewable resource, making hydroelectricity a reliable and long-term solution for energy needs in developing countries.
  • Reduced greenhouse gas emissions: Unlike fossil fuels, hydroelectric power generation produces minimal greenhouse gas emissions, helping combat climate change.
  • Low operational costs: Once the infrastructure is in place, the operational costs of hydroelectric power plants are relatively low compared to other energy sources.
  • Flood control and irrigation: Hydroelectric dams can help manage water resources, providing flood control and irrigation for agriculture, contributing to food security and economic stability.

Driving Economic Growth

The economic benefits of hydroelectricity are vast, especially for developing countries looking to boost their infrastructure, enhance industrial productivity, and create job opportunities.

Infrastructure Development

Hydropower projects require substantial investments, leading to the development of new infrastructure in remote regions. This includes the construction of dams, power plants, and transmission lines, which help connect previously isolated communities to the grid. Improved infrastructure enables the growth of industries, facilitates access to education and healthcare services, and supports overall economic development.

Job Creation

The construction and operation of hydroelectric power plants create a wide range of employment opportunities. From engineers and technicians to project managers and local laborers, job creation spans across various skill levels. Furthermore, the indirect employment generated through the supply chain and associated industries contributes to economic growth and poverty reduction.

Energy Access and Affordability

In many developing countries, a significant portion of the population lacks access to reliable and affordable electricity. Hydroelectric projects can bridge this gap, providing clean and affordable energy to both urban and rural areas. Improved energy access enables businesses to thrive, powers schools and hospitals, and enhances overall quality of life.

Foreign Investment and Export Potential

Hydroelectricity projects often attract foreign direct investment, driving economic growth and technology transfer. Developing countries with ample water resources can leverage their hydroelectric potential to export electricity to neighboring countries, establishing bilateral energy trading partnerships and boosting international relations.

Success Stories: Harnessing Hydroelectric Potential

Various developing countries have harnessed the economic benefits of hydroelectricity to transform their economies and improve livelihoods. Let’s take a look at a few inspiring examples:

China’s Three Gorges Dam

The Three Gorges Dam in China is the world’s largest hydroelectric power plant. This project has not only generated clean energy but has also fueled economic growth by stimulating local industries, tourism, and urban development. It has contributed to flood control efforts along the Yangtze River and strengthened China’s position as a global renewable energy leader.

Brazil’s Itaipu Dam

Itaipu Dam, located on the Paraná River between Brazil and Paraguay, has been a catalyst for economic development in both countries. The combined effort to construct and operate this hydroelectric plant has provided employment opportunities, energy access, and social services to the surrounding communities. Itaipu Dam is one of the world’s most efficient hydroelectric power stations and has significantly reduced Brazil’s dependence on fossil fuel-based electricity sources.

These success stories demonstrate how harnessing hydroelectric potential can lead to sustainable economic development and create a greener future for developing countries.


Hydroelectricity offers developing countries a pathway to a sustainable and prosperous future. By harnessing the power of water, nations can achieve not only environmental stability but also drive economic growth, job creation, and infrastructure development. With its low operational costs, minimal greenhouse gas emissions, and potential for foreign investment and export opportunities, hydroelectricity is a key enabler for green and inclusive economies. Investing in this renewable energy source paves the way for a brighter and greener future for all.

The World Bank
International Rivers

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