World Bank review of HydroPower

In the 1990s this has resulted in a succession of calls for a moratorium on World Bank funding and reparations for those affected by construction of large dams.
Although it had been involved in the financing of a relatively small proportion of the large dams, the World Bank Group had become a major focus of criticism because of the number of problematic projects, including some of the biggest and most controversial, in which it was involved. It was in this context that the independent Operations Evaluation Department (OED) of the World Bank began a review of large dam projects. The first phase was designed to be an internal desk study of 50 large dams assisted by the Bank and was completed by OED in September 1996. The second phase was planned to be a broader study, involving the collection of new data and participation by other stakeholders, to evaluate the development effectiveness of large dams in terms of technical, economic, social and environmental implications for future financing by the World Bank Group, as well as other sources.
Using available data for projects completed between 1960 and 1995, the dams were classified according to their economic justification and whether they satisfied the impact mitigation and management policies existing at the time of their approval, or could have been planned so as to satisfy policies that the Bank had introduced over the intervening years. OED concluded that while 90% of the dams reviewed met the standards applicable at the time of approvals, only about one quarter were implemented so as to comply with the World Bank’s current, more demanding policies. The review also concluded that mitigation of the adverse social and environmental consequences of large dams would have been both feasible and economically justified in 74% of the cases. The main conclusion was OED’s conditional support for the construction of large dams, provided that they strictly comply with Bank guidelines and fully incorporate the lessons of experience.