One innovative financing mechanism for hydropower projects is the use of Green Bonds specifically structured with a "water infrastructure" focus and backed by long-term Power Purchase Agreements (PPAs). How it works: The project developer issues Green Bonds, attracting investors interested in environmentally sustainable projects. The proceeds fund the hydropower construction. The "innovative" aspect lies in ring-fencing the project with strong PPAs from credible off-takers (e.g., national utilities or large corporations) that guarantee revenue streams for the bond's lifespan. This de-risks the investment, making it attractive even for complex hydro projects. The bond's coupon payments and principal repayment are directly serviced by these predictable PPA revenues, ensuring financial viability and investor confidence.