Energy security and water security are fundamental to development. Notwithstanding volatile hydrologic conditions and vulnerable economies, the ability to store and manage water is also limited: per capita storage in South Asia amounts to one-third of that in North America.

The World Bank believes that appropriate multi-purpose hydropower development can bring significant benefits in terms of access to electricity, diversified energy options, managing water scarcity (and over-abundance), and supporting water-dependent activities. Given the considerable untapped potential in developing countries, failure to include the hydropower option in development planning for both water and energy security has risks and costs that cannot be ignored.

The World Bank recognizes that hydropower can have contentious environmental and social impacts. Sustainable hydropower must focus on poverty alleviation to bring economic benefits, sound environmental management and improvements in the lives of the people. Although much has been learned about dams and hydro projects over the past decades, meeting the practical challenges of developing sustainable hydro will require hard work, learning, and collaboration within the Bank, with borrowers and internationally.

Harnessing the immense untapped hydropower potential in South Asia opens avenues for growth and provides an opportunity to improve the well-being of the people in the region, while making substantial contribution to the national economy.