Bolivia is located in western-central South America, it has an area of 1,098,581 km2 and a population of around 11.25 million people. In Bolivia, the natural conditions vary considerably between the regions lowlands (Llanos - annual rainfall average between 1000 and 4000 mm), the highlands (Altiplano - annual average rainfall around 200 mm) and the Valleys (Valles - annual rainfall of 400 to 500 mm), which are defined by altitude and topography. The most important Bolivian rivers start in the Andes and descend direction east across the valleys into the low tropical lands. The three main watersheds and river systems include the Amazonian Basin, the Central Altiplano Basin and the South or River Plata Basin. The major rivers of Bolivia are Madeira river, Paraguay river, Mamore river and Guapore river. For hydropower, in Bolivia, a remaining usable technical potential of around 40 GW was identified (large, medium and small hydropower). Only for small hydropower (regarded in HYPOSO as up to 10 MW, while the Bolivian classification includes Micro: P < 500 kW; Small: 500 kW < P < 5 MW; Medium Small: 5 MW < P < 30 MW), a potential of 50 MW is reported of which 21.3 MW have already been exploited.

According to the Bolivian Vice-ministry of Electricity and Alternative Energies (VEEA), the access to electricity in Bolivia grew significantly in the last decade, reaching up to 90.3% of coverage in 2016, benefitting 2.7 million households nationwide. Electrification in urban and rural areas reached up to 99 % (above 2 million households) and 73 % (approx. 746.000 households), respectively.

National and international organizations (World Bank, KfW, IDB, Danish Funds, the Nordic Fund and the National Treasury) allow the expansion and densification of the networks, installation of photovoltaic systems, micro-hydroelectric plants, the use of biomass and wind systems in rural communities of the territory. Thus, favourable framework conditions can be expected for SHP development in Bolivia. Although there are some funding schemes in the country, financial barriers exist due to several reasons: weakness of the microfinance sector, access to appropriate loans, lack of incentives for private investors, inadequate accounting for the quantity of energy sold, excessive dependence on government support and economic disadvantage compared to other types of renewable technologies. In the case of Bolivia, a barrier is the predisposition of the Bolivian Government to give support to projects that can be connected to the central electricity grid.

HYPOSO will get into discussion with politicians and local stakeholders, to facilitate more efficient ways in this administrative challenge. HYPOSO will also address the concerns of stakeholders that are against hydropower because of the negative impacts of large hydropower projects in Bolivia by convincing them of the advantages of SHP. With an unbiased approach, HYPOSO will improve the decision climate for SHP projects in Bolivia.