As part of a regional energy strategy and with sound legal and institutional arrangements, hydropower projects can be considered as a tool for economic development. Projects have multiple benefits including; longevity, favourable energy payback periods, and a pivotal role in integrated energy systems. The challenge is to demonstrate sound and equitable distribution of economic benefits at all stages of scheme development and operation. All significant hydro costs occur at the construction stage; once constructed, a hydropower project is virtually immune from further inflationary pressures and usually has a very long economic life. The interlinkages with environmental and social aspects of hydropower must be well understood.