The recent turmoil in the world's financial and commodity markets may turn out to be very good news for hydropower. During 2008, hydro development and construction activities were seriously affected by rapidly rising prices for steel, cement, fuel, and other essentials. The bubble of these rising costs has now burst - best signaled, perhaps, by the spiking of oil prices in July 2008 and their subsequent decline to barely one-fourth of peak prices. Many of the raw materials needed for hydro plant construction are now available at bargain prices. Moreover, the chaos in world financial markets has created a clamor for safety on the part of investors and a massive withdrawal of funds from traditional stocks and equities. This has led to a huge flow of funds into fixed-income-type investments, further leading to very low interest rates for high-quality borrowers - i.e., those who can give high levels of assurance for their repayment of debt. Owing to hydro's typical need for large amounts of borrowed capital, this opportunity to obtain low-cost funds could be highly advantageous.
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