Local benefit sharing in hydropowerprojects can be defined as the systematic efforts by projectproponents to sustainably benefit local communities affectedby hydropower investments. Benefit sharing is a promisingapproach for implementing hydropower projects sustainably,and is emerging as a supplement to the requirements ofcompensation and mitigation. Benefit sharing can provideequitable development, sustainability, and smooth projectimplementation for hydropower development. For benefitsharing mechanisms to work, the key enabling conditions aregovernment policies, the legal and regulatory framework,corporate social responsibility strategies of developmentcompanies, and the capacity of local communities.Stakeholder engagement is essential in initiating anddesigning benefit sharing programs. This guide provides someadvice to task teams on how to design effective localbenefit sharing mechanisms in hydropower projects. Benefitsharing arrangements would ensure that local communitieshave the opportunity to benefit directly from hydropowerdevelopment, which will make hydropower projects moreenvironmentally and socially sustainable. As a long-termarrangement, benefit sharing can facilitate localdevelopment. It can respond to unexpected environmentalcircumstances in the operation of dams to ensure localcommunities receive adequate benefits. Arrangements for theequitable sharing of benefits can offer scope for localcommunities and all other stakeholders to avoid conflictsand focus on creating synergies to maximize localdevelopment opportunities.
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