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Dams and Development E-Paper Contents

p. -1 of 74 BACK | NEXT Home Page of Dams and Development Foreword I. Why an e-paper on dams and development? II. Assessing options III. Participatory processes IV. Social impacts V. Environmental impacts VI. Benefit distribution VII. Dam safety and sustainability VIII. Existing projects IX. Improving governance X. What other organizations say XI. ADB, Dams, and Development XII. References Contact Us

World Bank - Benefit Sharing Report

The first phase of a desk study carried out for the World Bank, 'Benefit Sharing from Dam Projects'¹, draws on 11 case studies from Canada, China, Latin America, Norway and Southern Africa. Most are hydropower projects with one for water supply. Details are presented in annexes to the report.

Three justifications for benefit sharing are presented - economic, ethical and development

• Economic: 'Sharing monetary benefits from dams implies the existence of an economic rent from dam operation that goes to the owner of the dam but that can also be distributed to other entities'.
• Ethical: 'There is thus a strong ethical argument that local populations who have to sacrifice water and land uses should receive part of the monetary benefits that accrue to populations and enterprises outside the affected area. Such benefit sharing has to go beyond mitigation and compensation measures, recognising that local populations can claim entitlements to part of the ownership of the economic rent generated by the dam.
• Development: 'In poorer regions that have untapped water resources, dam projects can be planned as part of a regional economic development plan. Such a plan can take into account all resource potentials in the region as well as opportunities created by the reservoir and by access roads built for the construction of the dam and power plant. These new opportunities may include reservoir fisheries, irrigated agriculture, better access to markets or improved navigation. Part of the funding to implement the plan may be provided by channelling a portion of the benefits from the dam project to local and regional communities'.

This study focuses on mechanisms that ensure a direct monetary redistribution of project related revenues or profits to project-affected populations, associated with the existence of an economic rent. Such mechanisms go beyond resettlement and rehabilitation programmes and environmental and social mitigation or compensation measures.

Types of benefit sharing outlined in the report include:

• revenue sharing - redistribution of part of the dams revenue to local or regional authorities in the form of royalties tied to power generation or water charges;
• development funds - establishment of development funds financed from power sales;
• equity sharing or full ownership - part or full ownership of the project by project-affected populations;
• taxes paid to regional and local authorities - e.g. levying property taxes by local authorities; and
• other water related fees - granting preferential electricity rates and fees for other water related services to local companies and project-affected populations.

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