Procurement in this context means the purchase of goods or commodities by the project developer or operator, as well as contracting for services or goods. Hydropower projects rely upon a range of works, goods and services being provided to the project, for example contractors doing work, consultancies providing expert advice or contracts for materials, services or manufactured goods.
Good practice in procurement involves identifying major supply needs, supply sources, relevant legislation and guidelines, supply chain risk and corruption risks. Projects should put in place plans and processes to guide procurement of project goods, works and services, address identified issues or risks, and to meet procurement related commitments.
Good procurement practices can help projects to ensure that procurement of works, goods and services across major project components is equitable, efficient, transparent, accountable, ethical and timely, and that contracts are within budget or that changes to contracts are clearly justifiable.
Understanding good practice
International industry good practice in procurement 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. Procurement is addressed in P-12 for the preparation stage and I-8 for the implementation 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. Procurement is not addressed in the HESG Tool.