Different models for project implementation with the OGOP project developed
In what is another milestone in the One Gewog One Product (OGOP) project, spearheaded by Her Majesty the Gyaltsuen, different avenues or models for project implementation with the project has been opened, which includes joint ventures (JV), foreign direct investment (FDI) in the near future, collaboration with Dessups, Gyalsups and the youth, partnership with farmers and business houses and projects critical for socio-economic development. These are in line with the “Framework for Engagement and Investments” to upscale the OGOP Project, which, apart from others would provide the basis and opportunity for engagement with the private sector, start-ups, and foreign investors for investments in the value chain development.
The JV model allows OGOP to enhance project implementation by partnering with private entities and start-ups, expanding market access, and sharing resources and risks. Under the Companies Act of Bhutan, 2016, OGOP can collaborate to create a new entity, retaining the majority share.
Aligned with OGOP’s goals, the model will empower rural communities, boost food security, promote sustainable growth, and preserve Bhutan’s heritage. It will also support farmers and home-based producers in becoming entrepreneurs.
Forming a JV involves identifying partners, defining contributions, and signing agreements on ownership, decision-making, profit-sharing, management, and exit strategies. OGOP will hold at least 51% of shares. A Board of Directors will oversee strategy, with a democratically elected Chairman and a CEO appointed for a maximum of two 5-year terms. Key management roles will be filled by partner nominees or external hires.
OGOP also aims to attract foreign investment to promote a green, sustainable economy, focusing on agriculture, processing technology, and quality control. FDI will develop international markets, support rural development, and preserve Bhutan’s cultural and ecological heritage.
Under Bhutan’s FDI Policy 2019, foreign equity of 20% to 49% is allowed, with project costs of Nu. 20 million for agro-production and Nu. 50 million for other manufacturing. Partners can contribute up to 10% as sweat equity. FDI businesses will be incorporated under the Companies Act of Bhutan, 2016, with a Board of at least three directors, including one independent, and a Chairperson either elected or appointed by Her Majesty’s Project Office.
There are also projects to create employment and income opportunities for youth, Desuups, and Gyalsups, fostering innovation and economic growth. By providing skills and resources, these initiatives will improve livelihoods.Youth skilled in modern technologies will boost productivity, while a Project Management Unit under OGOP will guide the project. Profits will be reinvested, with transparent accounting.
Desuup projects will be routed through Desuung HQ, and Gyalsup projects through the relevant agency, which will handle clearances and recommend proposals for support. A tripartite agreement will be signed for implementation, ownership, and monitoring. For other youth, Dzongkhags will facilitate clearances, technical support, and related matters.
OGOP’s Entrepreneur Development Model supports farmers, production houses, youth, women, start-ups, and small industries through a value chain system linked to the market. It encourages sustainable initiatives with good returns on investments, offering technical support to farmers in coordination with partner agencies.
OGOP will invest up to 70% of the project cost after technical evaluation, maintaining co-ownership of operations and management. The investment will be reinvested into OGOP once the project generates income, with a minimum 20% plough-back agreement.
After three years of successful operation, OGOP will offer opportunities for further investment. Proposals must be routed through the relevant Dzongkhag for evaluation, clearances, and tripartite agreements on implementation, co-ownership, and monitoring.
The OGOP’s Project Lead Model targets critical socio-economic projects that may not attract private or foreign investment due to long gestation periods or low returns. OGOP will be the sole investor and implementer, identifying key areas for strategic investment and forming companies for project development.
A Project Leader (PL) will be recruited to oversee the project from inception to full operation. The PL’s remuneration will be based on qualifications and experience, with performance-based pay once the project is operational.
The PL will define goals, timelines, and resources, creating a detailed plan with milestones and risk strategies. Under QPO’s guidance, the PL will lead the team, track progress, manage risks, and adjust resources as needed. Regular reports and documentation will be submitted to QPO. The PL will make key decisions, ensure quality, and oversee audits. After establishment, the PL will manage the project as CEO.
Sangay Rabten from Thimphu
