This paper discusses the common environmental issues and requirements project lenders have when financing hydropower dam projects in developing countries. The environmental specialist’s role, as part of the Lender’s Technical Advisor team, is discussed throughout the main phases of project finance (credit approval, financial close, lending/construction and loan repayment/operation). Further, how environmental issues are reviewed and monitored, thereby minimising reputational risks to the lenders are outlined.
Lenders typically consider hydropower dam financing, especially reservoir schemes, as high reputational risk loans. Finance is usually syndicated and although most international lenders are Equator Principles signatories or use the International Financing Corporations (IFC) Performance Standards, some lenders have additional environmental guidelines and requirements to enable financing. These differences are discussed.
Common environmental concerns include loss of habitat of endangered and/or threatened species, changes to river flows, erosion and sediment control during construction, and the minimisation and disposal of project wastes.
These issues are discussed drawing on the author’s experience in monitoring environmental issues of hydropower projects in Asia Pacific and Africa, including both smaller run-of-river schemes and larger storage reservoir projects.
Keywords: Environment, impacts, project financing, concerns, lenders, lenders technical advisor.
This paper explores the role of the Lenders’ Technical Advisor (LTA) in identifying and mitigating risks in hydropower dam projects on behalf of the project lenders. It describes the LTA services that are required to manage the pre-financial close, construction and financing periods.
There are differing types of risk in both large and small hydropower projects (contractual, commercial, participant, completion, country, technology, reputational, environmental and social, etc.) and these are discussed with regard to how the lenders may be exposed if the risk eventuates either during dam construction or in operation.
Whereas a large dam for water supply would in its own right be a major project, the dam(s) associated with large hydropower will likely represent less than 25% of the total project cost and with this imbalance comes competing drivers for the other components (tunnels, waterways, powerhouse, M&E equipment, transmission lines, substations, etc).
The paper discusses the typical process whereby a hydropower developer has procured a feasibility study and is working towards financial close — covering both large and small types, i.e. storage dams and run-of-river diversion weir types, and the noticeable trend for fast-tracked developments to make a single large step from feasibility study through to engineer-procure-construct (EPC) contracting. This scenario presents some challenges for the initial due diligence when assessing in the pre-financial close stage.
The paper draws on case studies from the Asia Pacific region to illustrate the key elements in hydropower project financing from the LTA’s perspective, together with the author’s recent and current experience on multiple hydropower projects across Asia and Africa in the run-of-river, storage reservoir and pumped storage type of plants. It also brings together findings from the author’s own recent papers on the subjects of hydropower feasibility studies, the roles of lenders, owners and advisors, and tailored for an ANCOLD audience where the focus is on the dams component of hydropower.
Keywords: Lenders’ Technical Advisor, Dams, Hydropower.
Nihal Vitharana, Nuno Ferreira
The raising and/or stabilising of existing concrete gravity dams by continuous concrete buttressing is a viable solution and, in some cases, it is the only solution available. There are few medium-large dams in Australia currently under consideration for raising with continuous buttressing.
Two of the major issues to be surmounted are: (a) the existing dam should not be subjected to cracking (particularly on the upstream face) due to heat-hydration effects, and (b) the requirement for the two dam bodies to resist the hydrostatic and other loadings as a monolith (unified dam).
However, there is great need for understanding the mechanisms involved in selecting an appropriate heat-of-hydration model and in calculating thermal stresses rationally. Due to such lack of understanding, expensive precautions, mostly with compounding conservatisms, would be adopted in concept and detailed designs eg. shear-keys on the interface, artificial cooling, post-grouted interface, anchor bars at the interface, concrete with high cement contents. On the other hand, unsafe designs could be the result.
The paper discusses these issues highlighting that a rational approach can be adopted to economise the design and construction processes. An example is also presented to demonstrate how the potential for temperature-induced cracking in new and old dam bodies can be evaluated with reduced uncertainty by considering all the mechanisms involved in a holistic way.
Keywords: Heat-of-Hydration modelling, raising concrete dams, thermal stresses, concrete buttressing
Jason Fowler, Robert Wark
Tropical Forestry Services (TFS) currently (2015) leases Arthur Creek Dam from the West Australian state government and utilises the water source to drip irrigate its Indian sandalwood (Santalum album) plantation. Arthur Creek Dam is located approximately 70 km south west of Kununurra in the East Kimberley region of Western Australia. TFS grows and processes the sandalwood to produce oil that is used extensively in the global fragrance perfume market. TFS took over the lease of the 26 m high zoned earth core and rock fill dam in 2007 and has systematically carried out remedial works to the structure to lower the f-N curve below the ANCOLD “Limit of Tolerability” and to well within the ALARP zone. This paper describes the proactive risk management approach TFS has undertaken to address dam safety issues. It also specifically describes the most recent management issue, being the outlet pipe refurbishment.
A number of dam safety issues were identified during the initial surveillance and subsequent annual surveillance inspections. Issues include insufficient spillway capacity, seepage from the right abutment and deterioration of the steel outlet pipe. The remedial works to the outlet pipe were completed in late 2014 and involved close collaboration between TFS, the contractor and the designer. The outlet pipe re-sleeving operation was complex as the dam had to remain in operation and the water level could not be artificially lowered. In addition, the original outlet pipe was asymmetrical along both the vertical and horizontal axes, close to the bulkhead gate structure. Contingency measures were employed to enable the dam to remain in operation with 3 DN 400 HDPE siphon pipes installed.
The completion of the refurbishment of the outlet pipe by sleeving the pipe reduced the risk posed by this structure by an order of magnitude. Planned future risk reduction measures include the treatment of seepage within the upper right abutment and rebuilding the crest. These actions will further reduce the risk of dam failure through piping and overtopping of the dam crest.
Keywords: risk, ALARP, outlet pipe, re-sleeving.
Cat McConkey, Zarmina Nasir, Rachel Caoil
The Enlarged Cotter Dam (ECD) is the first major project to be assessed and approved under the new planning regime in the Australian Capital Territory (ACT). ACTEW chose the ECD as its highest priority option in securing Canberra’s water supply for the future because of its relative economic benefit to the community, reliability of water supply, technical feasibility and comparatively low environmental impact.
The planning and construction of large dams has been reduced from a typical 10 plus years to four years in the ACT and surrounds for the ECD. Australian and International Dam design and construction has significantly developed from a time when dam approvals focused on engineering, economics and constructability to now include regulatory planning processes that seek to reconcile environmental, social and economic impacts.
This paper explores and contrasts the experience of securing approvals for the ECD in 2009 to past experiences of dam planning approvals and consultation processes.