The Ministry of Energy and Natural Resources (MoENR) is preparing a major recalibration of its 13th Five-Year Plan (13th FYP), following a recent Mid-Term Review (MTR) that exposed gaps in implementation, weak alignment between spending and outcomes, and the growing need to reposition Bhutan’s development strategy around emerging national priorities.
The proposed course correction seeks to align the Ministry’s long-term planning framework with transformative initiatives such as the Gelephu Mindfulness City (GMC), the 21st-century economic roadmap, and the Diamond Strategy, while strengthening accountability and improving sectoral performance.
At the heart of the review is a broader shift toward a more adaptive and results-driven planning model—one that places greater emphasis on measurable outcomes, fiscal efficiency, sustainability, and institutional coordination.
Economic Recalibration
A central message emerging from the MTR was the need to ground national targets in economic realities rather than aspirational projections alone. Agencies have been directed to clearly quantify outcomes alongside budget allocations, reflecting growing concern over weak links between expenditure and measurable impact.
The review identified the water and forestry sectors as underutilized economic assets with the potential to contribute more meaningfully to Bhutan’s GDP. Authorities recommended reassessing existing targets and exploring ways to increase sectoral output, signaling a broader effort to diversify Bhutan’s economy beyond hydropower and traditional revenue sources.
Climate financing also emerged as a major strategic priority. The government encouraged MoENR to strengthen access to international climate financing platforms and deepen collaboration with allied sectors, reinforcing Bhutan’s global positioning on environmental leadership while addressing rising domestic investment needs.
Experts say the renewed emphasis on climate finance reflects growing recognition that Bhutan’s transition toward a green economy will require substantial external financing, particularly as the country balances conservation priorities with economic modernization.
Electricity reliability indicators—specifically the System Average Interruption Frequency Index (SAIFI) and the System Average Interruption Duration Index (SAIDI)—also came under renewed scrutiny. The review called for a more realistic assessment of these metrics across Thimphu and other dzongkhags, noting that official improvements must accurately reflect service delivery conditions experienced by consumers.
The MTR further pointed to inconsistencies between reported achievements and budget utilization, prompting calls for tighter expenditure discipline and stronger accountability mechanisms. Officials were directed to ensure that public spending translates into tangible outcomes and measurable development gains.
Energy and Resource Security
The review signaled a broader rethink of Bhutan’s energy and resource strategy, with officials proposing the development of a comprehensive Energy Security Strategy anchored in the country’s hydropower strengths but diversified to include emerging technologies and alternative energy systems.
Reducing dependence on fossil fuels was identified as both an environmental imperative and an economic opportunity. The assessment encouraged continued exploration of Sustainable Aviation Fuel (SAF) and green hydrogen, particularly within the context of GMC and Bhutan’s broader low-carbon ambitions.
Officials also proposed integrating donor-supported electric vehicle procurement into the Energy Security Strategy to accelerate the country’s transition toward cleaner transportation systems.
The concept of energy diversification reflects growing concern over Bhutan’s seasonal energy vulnerabilities, especially winter power shortages and rising fuel import dependence.
The MTR additionally repositioned the water sector as both a regulatory priority and a future engine of economic growth. Authorities called for research into microplastic contamination in packaged drinking water, underscoring increasing concerns over public health and product standards.
At the same time, the review urged agencies to explore large-scale export opportunities for Bhutanese drinking and packaged water through detailed market analysis and potential joint ventures with regional partners such as India and Bangladesh.
However, officials cautioned that any commercialization of water resources must remain environmentally sustainable. Assessments of groundwater reserves and long-term resource viability were identified as critical safeguards against overexploitation.
Hydropower investment trends also drew attention during the review. The withdrawal of B.Grimm Power from the Dangchu Hydropower Project has been flagged for further analysis, with policymakers seeking to understand the underlying causes and broader implications for Bhutan’s investment climate.
Meanwhile, the long-pending 2,800 MW Kuri Gongri Hydropower Project has been identified for urgent resolution, with outstanding issues expected to be addressed through high-level bilateral engagement.
In the mining sector, officials stressed the need for stronger coordination between agencies such as the Department of Geology and Mines (DGM) and the Department of Surface Transport (DoST) to mitigate geo-hazard risks associated with infrastructure expansion.
The quarterly revision of the Minimum Floor Price (MFP) for mineral exports was endorsed as an important mechanism for protecting government revenue and preventing undervaluation and market distortions in cross-border trade.
Institutional Reform and Governance Challenges
Beyond economic and resource planning, the MTR highlighted deeper institutional and governance challenges affecting implementation efficiency.
One key issue identified was ambiguity in air quality governance. While monitoring responsibilities currently fall under the Department of Environment and Climate Change (DoECC), the assessment noted uncertainty over which agency is ultimately accountable for maintaining air quality standards.
Officials called for comprehensive studies into pollution sources—including vehicle emissions, agricultural burning, waste disposal practices, and traditional smoke-related activities—and recommended measurable indicators such as improvements in the Air Quality Index (AQI) in urban centers.
The forestry sector is also expected to undergo a shift from volume-based targets toward quality-focused outcomes. Improving sawmill efficiency and prioritizing plantation survival rates over raw planting numbers were identified as necessary reforms to reduce resource wastage and improve sustainability outcomes.
Human resource challenges emerged as another major concern. Rising attrition within the civil service prompted calls for stronger leadership, improved employee recognition, and more effective retention strategies.
Particular attention is being given to officials on Extraordinary Leave (EOL), many of whom eventually resign from service. Agencies have been encouraged to examine the underlying causes of workforce exits and strengthen institutional support systems to improve long-term retention and organizational stability.
Meanwhile, Prime Minister (PM) Dasho Tshering Tobgay, while expressing satisfaction with the Ministry’s overall progress, advised officials to explore strategies to maximize the value of what he described as the country’s “crown jewels,” referring to Bhutan’s natural resources and environmental assets. The PM is expected to follow up on the MTR discussions with the Ministry in two months.
Tashi Namgyal, Thimphu
