Supporting Communications: FAQ Understanding the Hydropower Bond Criteria

The Climate Bonds Initiative (CBI) has established the Hydropower Criteria to help investors identify hydropower projects that support the Paris Agreement. To be certified, projects must pass a two-part assessment: Mitigation Criteria, which set specific greenhouse gas (GHG) emission thresholds based on the operational date, and Adaptation & Resilience (A&R) Criteria, which use the ESG Gap Analysis Tool to ensure adherence to international best practices across 12 environmental and social dimensions. Certification requires independent verification by accredited assessors licensed by the International Hydropower Association (IHA). The criteria exclude indirect emissions from construction and the economic viability of projects, focusing instead on climate integrity and social responsibility.

• To qualify for a Climate Bond, hydropower projects must meet both Mitigation and Adaptation & Resilience (A&R) Criteria. Mitigation thresholds for GHG footprints are based on the facility's operational date: those operational before 2020 must have a footprint under 100g CO2e/ kWh or a power density under 5W/m2, while those operational from 2020 onwards must be under 50g CO2e/ kWh or 10W/m2.
• The Adaptation & Resilience (A&R) component requires a site-specific assessment using the ESG Gap Analysis Tool to identify discrepancies between a facility's practices and international standards. If gaps are found, an Environmental and Social Action Plan must be implemented within strict timeframes to avoid disqualification.
• The A&R assessment covers 12 distinct environmental and social impact areas, including biodiversity, indigenous peoples, resettlement, water quality, and labour conditions, reflecting the view that social impacts are interconnected with climate resilience.
• Certification of a hydropower Climate Bond requires independent verification by an accredited assessor with at least six years of sector experience and specific auditing qualifications. These assessors are licensed by the International Hydropower Association (IHA).
• The Hydropower Criteria specifically exclude certain factors from their assessment, including the economic viability of the projects and indirect emissions associated with the construction value chain, such as material extraction and transport.

APA

Climate Bonds Initiative (n.d.). Supporting Communications: FAQ Understanding the Hydropower Bond Criteria. https://www.climatebonds.net/files/drupal-files/files/standards/Hydropower/Hydropower%20FAQs%20-%20March%202021.pdf

Chicago

Climate Bonds Initiative. Supporting Communications: FAQ Understanding the Hydropower Bond Criteria. n.d. https://www.climatebonds.net/files/drupal-files/files/standards/Hydropower/Hydropower%20FAQs%20-%20March%202021.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Supporting Communications: FAQ Understanding the Hydropower Bond Criteria |url=https://www.climatebonds.net/files/drupal-files/files/standards/Hydropower/Hydropower%20FAQs%20-%20March%202021.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiativendsupporting, author = {{Climate Bonds Initiative}}, title = {{Supporting Communications: FAQ Understanding the Hydropower Bond Criteria}}, institution = {Climate Bonds Initiative}, url = {https://www.climatebonds.net/files/drupal-files/files/standards/Hydropower/Hydropower%20FAQs%20-%20March%202021.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }