Sharing the revenue from large dams to support local development

Large dams can spur a country’s development: from providing energy and supporting irrigation, to regulating water supplies. But in local communities dams have caused controversy. When a dam is built on their land, not only are natural ecosystems disrupted,
but thousands of people are forced to resettle. The past has shown that, too often, these displaced communities struggle
to rebuild their lives. Dams have often been built with the primary aim of benefitting a whole nation
– such as supplying electricity or irrigation. This overlooks the benefits dams could bring to local communities. But we can learn from the past. Sharing the benefits of dams at the community level can give more support
to local development while also meeting national objectives. And there are different ways that local affected people can share in the
benefits from a dam, such as secure access to irrigated land or electrification of local villages. One of the simplest and most effective ways is to provide local communities
with a steady finance stream of revenue that comes from the electricity generated by the dam. This can be done by setting up a local development fund. Compensation and resettlement programmes are well financed but
last only 4 or 5 years. A local development fund, however, runs through the lifetime of a dam. Money from the fund can support future livelihood opportunities after the
compensation programme ends and can also be used to fix unexpected issues, such as flooding from the dam
or an unplanned influx of migrants in the area. These funds, when well thought through, are particularly effective because they
allow local people to control how the money is used, ensuring it targets community priorities. Benefit sharing approaches using revenue streams are already used in
Ghana and Nigeria, and included in policies of the Niger Basin Authority and ECOWAS. Putting them into practice more widely would benefit everyone: Governments could achieve a better balance between local and national
development The dam manager would have improved social relations with local
affected people And affected communities and traditional river users would become primary
beneficiaries of a project that has directly impacted their lives. To ensure plans for benefit sharing are clear and binding they must be
anchored in legislation and included in the design stages of the dam. If local people control part of the dam’s revenues and can apply them
directly to their own development priorities then dams will be more acceptable to the affected communities,
and benefit the nation as a whole.

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