Bhutan imports goods worth Nu 52.50bn from India

Kholongchhu Project to be a fully DGPC owned subsidiary

If everything goes as planned, by the end of the year, Druk Green Power Corporation (DGPC) and Satluj Jal Vidyut Nigam Ltd (SJVNL), will complete settling the transfer of shares, after which Kholongchhu hydropower project will become a fully DGPC owned subsidiary.

Speaking to the paper, Economic Minister Loknath Sharma said that such an agreement was drawn based on the recent bilateral discussions between the Governments of Bhutan and India at the Power Secretary Level meeting held on October 31, 2022 in Thimphu.

Lyonpo said that both DGPC and SJVNL will settle the transfer of shares by the end of December 2022. “The Kholongchhu Project will thereafter be fully DGPC owned subsidiary,” the minister added. 

He underlined that the Government of India (GoI) will provide support in terms of access to finance from India and market for power sale. As of now, DGPC is providing interim relief measures to the project’s contractors, employees, suppliers, house owners, and other exigencies.

Confirming this, Managing Director (MD) of DGPC, Dasho Chhewang Rinzin said that currently DGPC is in discussion with SJVNL on buying back shares.

“We are hopeful the discussion will go smoothly and we have time till the end of the year, and we will be able to know the result by the first week of January next year,” Dasho said. 

Dasho Chhewang Rinzin further mentioned that currently both the government of Bhutan and DGPC is taking interim measures in Kholongchhu Hydro Electric Power. Dasho shared that DGPC is making the payments to the employees of the project as an interim measures.

“The responsibility has completely fallen on DGPC although we are still on the process to buy back the shares and we are now making the payments to all the staff who are left over there,” said Dasho Chhewang Rinzin, adding that DGPC is also making payments to the contractors who are continuing the infrastructure works. 

Dasho also informed that from the government’s side, discussions are on concerning completing of road construction from Doksum to Buyang and Tongsang gewog roads in Trashiyangtse. 

Meanwhile, the same has been mentioned in the State of the Nation Address that Prime Minister (PM) Dr. Lotay Tshering delivered on December 8, 2022.

The PM’s address also saw reflections of the nation’s emphasis on energy security and a shift in hydro-power policies.  

Underscoring that the new areas of investments are in Energy including Hydropower projects, it was reported that the gross revenue generation from all hydropower plants in 2021 was Nu 11.64bn. In order to enhance energy security, the 17.38MW Sephu solar farm in Wangduephodrang will be implemented.

 Simultaneously, the 80KW solar PV decentralized distribution plant at Aja-Ney, Mongar, is also being implemented.

The State of the Nation report highlights energy security, boosting economic activities and creates productive employment through building the national capacity. It mentions that DGPC initiated the construction of three small hydropower projects in June with a total installed capacity of 104MW.

The small hydro power project includes 18MW Suchhu hydropower project located at Sangbaykha near Tsholingna village in Haa, and the project is expected to cost Nu 2.095bn and to be completed by 2025.  

Similarly, 54MW Burgangchhu project at Nangkhornear Buli in Zhemgang dzongkhag will be built with a total budget of Nu 3.565bn and the project is expected to be completed in three years.

Another is the 32MW Yungichhu Project, which is being constructed in Maedtsho near Onnger in Lhuentse with an estimated project cost of Nu 3.66bn and is scheduled for completion in three years. The main civil works are being constructed by Bhutanese contractors in all three projects.

Meanwhile, the government is assessing the feasibility of establishing additional small hydropower projects including the 85MW Jomori in SamdrupJongkhar, 45MW Gamri-I and 85MW Gamri-II in Trashigang, followed by the 18MW Druk Bindu in Samtse and 20MW project at Begana in Thimphu. The construction of these projects will commence next year.

The other Energy hydropower project includes the 2800MW Kuri-Gongri reservoir hydro electric power, 404MW Nyera Amari I and II integrated hydro electric power. The 118MW Nikachhu, will be commissioned by June 2023 as 85% of the work is completed with Nu 10.83bn spent as of September this year.

Another area is the formulation process of Green Hydrogen Roadmap, which will be finalized next year. Begana Hydro power project is also identified and the feasibility study is to be completed by June next year.

The address also draws ones attention to the 1200MW Punatsangchhu-I construction.  About 87.53% of the work has been completed and Nu 83.309bn spent as of September this year.

Similarly, 1020MW Punatsangchhu-II is scheduled for commission by 2023/2024 with 92.62% of the work completed and Nu 77.201bn spent as of September this year.

The State of the Nation report also states that the three industrial parks in the country is expected to be completed by June 2023.

 The parks are located in Jigmeling, Sarpang with 86% of the work completed, followed by 86% and 85% of work completion in Dhamdum, Samtse and Motanga, Samdrup Jongkhar, respectively.

“The developments of the three industrial parks are at an advanced stage. On completion, the industrial parks will contribute to diversification of the economy, job creation, export enhancement and revenue generation among others,” the report states.

Sherab Dorji from Thimphu