Increasing government support will encourage investments from the public and private sectors to tap into the substantial unexploited hydropower potential found in Latin America and Africa world, according to a new report by business intelligence expert GBI Research.

The new report – Hydro Power Market to 2020 – Energy Management Strategies and Green Funds to Drive Emerging Markets in Latin America and Africa – states that hydropower is expected to remain the highest contributor to global renewable power, despite increasing investment in other renewable resources to meet the growing demand for electricity.

Enormous support in the form of financial policies and incentives is currently provided by world governments in favor of hydropower generation. Hydropower is an inexpensive and reliable form of clean energy, and as a result is gaining increased levels of interest, seen in the development of many available opportunities for the exploitation of natural water resources around the world.

Africa is expected to have become an emerging hydropower market by 2020, as there is significant hydropower potential in this region, particularly in the countries of Mozambique and Ethiopia. At present, a lack of proper infrastructure and investment hinders the maintenance and renewal of existing hydropower plants, slowing the growth of the African hydropower market. Nevertheless, increasing electricity requirements in these developing nations are leading governments to develop lucrative policies and incentives to secure investments in the hydropower sector.

The South and Central American region also holds high levels of unexploited hydropower energy, especially in Venezuela. The national electricity crisis of 2009-2010 showed that Venezuela was unprepared to meet national demand in cases of drought or other natural disasters, and positively impacted upon the development of the hydropower sector. The country’s government directed focus towards the augmentation of hydropower installed capacity, and a number of projects have been planned by national electricity corporation Corpoelec in an attempt to decrease the country’s dependence on the single Guri dam.

The global hydropower cumulative installed capacity increased at a Compound Annual Growth Rate (CAGR) of 4.2% for the period 2005-2010, from 601.1 Giga Watts (GW) in 2005 to 739.2 GW in 2010. According to GBI Research, the cumulative installed capacity of the global hydropower market is expected to grow to 1,051.1 GW in 2020 at a CAGR of 3.6%.