Demonstrated Need and Strategic Fit

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Demonstrated need and strategic fit refers to the contribution of a hydropower project in meeting demonstrated needs for water and energy services as identified through broadly agreed local, national and regional development objectives, policies and plans.

The better a developer can demonstrate alignment, have its own policies clearly established to address significant project issues, and ideally also demonstrate a track record of implementation, the more likely it is that the developer will be able to gain stakeholder support.

Adhering to good practice in this guideline can help a project fit with development objectives and relevant policies, and be confident that it is a priority option in meeting identified needs for water and energy services.

Understanding good practice

International industry good practice in demonstrated need and strategic fit for hydropower projects is defined in the Hydropower Sustainability Guidelines on Good International Industry Practice (HGIIP).

The guidelines were published by the International Hydropower Association and are governed by the Hydropower Sustainability Assessment Council, a multi-stakeholder group of representatives of civil society, industry, governments and financial institutions.

Assessing project performance

Two assessment tools are available to measure hydropower project performance:

The Hydropower Sustainability Assessment Protocol (HSAP)  is used by independent accredited assessors to consider whether a project has achieved good and best practice at different stages of its life cycle. Demonstrated Need and Strategic Fit is addressed in P-3 for the preparation stage.

The Hydropower Sustainability ESG Gap Analysis Tool is used by independent accredited assessors to help project teams address any gaps against good practice in environmental, social and governance topics across 12 assessment sections. Governance is addressed in Section 1.

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