1 Greenfield Development / Brownfield Acquisition The Unmasking of Hidden Risks & Value Kevin I Candee Managing Partner Aqua Energie LLC Syracuse, New York Kevin.I.Candee@aqua-energie.com Laurent Nahmias-Léonard Vice-President, Project Execution Virunga Power Nairobi, Kenya Laurent.nahmias-leonard@virungapower.com Introduction The drive for a low-carbon energy future is attracting new investors to the hydropower sector. Governments at federal, state and city levels have launched demand-pull initiatives for clean technology (“CT”) to reduce carbon footprints. The imperative of shifting to a low-carbon economy is resulting in a growing interest in CT (Polzin, 2017, Schwerhoff and Sy, 2017). Interest in CT from financial actors has also revived the potential for the hydropower sector, especially small and medium-sized hydropower. Mobilizing investment capital to frontier markets presents new opportunities and potentially higher value for savvy investors. The drive for a low-carbon future has provided fuel to the hydropower sector (Mazzucato, Semieniuk, 2018, Polzin, 2017). However, investors new to the sector often lack breadth of experience and subject matter expertise, increasing vulnerability to failures. Effective risk management is key to successful hydropower projects. Until investors are capable of understanding and managing risks carefully, the small and medium-sized hydropower sector will remain underfunded due to a flawed perception that many risks are fundamentally uncontrollable. One recurring question is: should investors opt for greenfield development or brownfield acquisition in frontier markets? Since there is no single right answer, investors need to thoroughly understand the very different risk configurations for greenfields and brownfields and how they align with investors’ own risk appetite and internal capacity for risk management. This paper discusses the structural barriers to CT investment and the unmasking of hidden risks and value. It uses greenfield and brownfield project case studies to unmask mitigation strategies for hidden epistemic risks and management strategies for the stochastic risks that are inherent in hydropower. This paper is structured as follows: Section 1 – Introduction Section 2 - Development Barriers, discusses the nature of development barriers inherent in both Greenfield and Brownfield hydropower investment. Section 3 – Greenfield Case Study, discusses a project where a potential investor identified risks outside their specific risk appetite, and offers solutions for consideration Section 4 – Brownfield Case Study, discusses a project where risks were extensive and significant upside potential is identified. Section 5 – Conclusion