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Figure A.2Capacity factor, as planned (%)12010080604020Capacity versus Planned CapacityUtilization, CDM Hydropower Plants00 50 100 150 200 250 300Capacity (MW)Source: UNEP Risoe CDM database.Note: CDM = Clean Development Mechanism; MW = megawatt.Figure A.3ROEReturn on Equity as a Function ofElectricity Tariff0.80.70.60.50.40.30.20.100–0.10.02 0.04 0.06 0.08 0.1 0.12Tariff ($ per kWh)Medium hydro Large hydro WindSource: IEG.Note: These are hypothetical returns using a standardized set of assumptions.kWh = kilowatt hour; ROE = return on equity.Table A.5ResettlementandenvironmentalissuesKey Factors in Hydropower Project Performance, with Outcomes and Lessons fromProject ReviewsNegative examplesLatin America: One factor that led to unsatisfactory projectratings was that the resettlement and environmentalmanagement program were only partly implemented, withmajor issues remaining unaddressed. In addition, pooroversight of the areas to be flooded resulted in invasion offamilies seeking resettlement compensation.Government was slow in performing land acquisitions andhousing construction, adding to pressures that sloweddown project.Africa: Absence of information disclosure and communicationsdeveloped in a sustainable manner.East Asia: Until 2003, resettlement was carried out inadequatelybecause of lack of knowledge or understanding atthe provincial level of the Resettlement Action Plan, someprovincial offices’ delayed approval of the compensationguidelines, and disparity between the compensation ratesin the Resettlement Action Plan and that which the provincesapproved. In 2003, the situation was resolved withPlan-based compensation agreements being signed with allthe households.Positive examplesEast Asia: Ertan resettlement program appears tohave been successful overall and has given satisfactoryresults in terms of restoration or improvementof living standards and better access to infrastructureand other services for the bulk of the affected population.A 10-year post-project rehabilitation levy of onthe project company’s electricity sales provided fundsfor environmental protection around the reservoir,infrastructure maintenance, infrastructure improvements,and income-boosting activities for the resettlementvillages. This is a useful instrument to help ensureproject sustainability, because it eliminates uncertaintyabout funding from budgetary sources. The use of aninternational environmental and resettlement panelproved its worth.East Asia: High-quality up-front assessment ensuredthe project success—the highly satisfactory outcome ofresettling more than 74,000 people.East Asia: An independent review rated resettlementperformance highly — “the best resettlement optionwas deduced from the country’s past resettlementexperience. The women’s role in resettlement is emphasized.”An international panel of experts on environmentand resettlement has conducted 12 meetings andhelped ensure effective management of adverse environmentalimpacts, by overseeing implementation of asystematic environmental management plan.(continued)92 | Climate Change and the World Bank Group