PM Dasho Tshering Tobgay calls it a proud moment
In keeping with Bhutan’s overall energy sector vision to take its overall generation capacity to 25,000 MW by 2040 for its energy security and regional energy integration, the Memorandum of Understanding (MoU) was signed on November 20, 2024 in Thimphu between Dasho Chhewang Rinzin, Managing Director (MD) of Druk Green Power Corporation (DGPC), and Dr Praveer Sinha, CEO and MD – Tata Power.
With the support of the Royal Government of Bhutan (RGoB) and the Government of India (GoI), this marks the largest partnership between two of the leading power companies of the two nations in Asia’s clean energy sector.
Through this collaboration, at least 5,000 MW of renewable energy projects; including 4,500 MW of hydropower comprising the 1,125 MW Dorjilung HEP; 740 MW Gongri Reservoir; 1,800 MW Jeri Pumped Storage; and 364 MW Chamkharchhu IV will be developed in phases together with another 500 MW of Solar projects.
Tata Power Renewable Energy Limited (TPREL), a subsidiary of Tata Power, will lead the development of the 500 MW of solar projects across Bhutan. Tata Power also has a transmission project of a 1,200 km long Tala transmission line that evacuates clean power from Bhutan to India.
Dr. Praveer Sinha, CEO and MD, Tata Power, said, “Tata Power’s partnership with Druk Green Power Corporation reinforces our credentials as the most preferred clean energy partner in the region. Together, we are building 5 GW of clean energy capacity that will help harness Bhutan’s hydro power potential and support both countries’ growing energy demands with reliable and round-the-clock clean energy supply. This partnership is helping us shape a new energy era.”
Dasho Chhewang Rinzin, MD, DGPC said that this strategic partnership with Tata Power is in keeping with Bhutan’s aspirations to maximize benefits to the people of Bhutan through fast-tracking the harnessing of its huge renewable energy resources for its economic development and long term energy security. “Bhutan places a lot of confidence in Tata Power and the partnership to deliver on these expectations.”
Bhutan plans to achieve this target through diversification in its energy portfolio beyond the traditional hydropower to solar and geothermal and diversifying project structuring and financing through such strategic partnerships.
Tata Power has a long-standing relationship with DGPC since 2008 when the two companies joined forces to successfully develop the 126 MW Dagachhu Hydropower Plant as the first Public Private Partnership in Bhutan’s hydropower sector.
As a precursor to this collaboration, Tata Power recently acquired a 40% stake for Nu/INR 8.30 billion in the 600 MW Khorlochhu Hydroelectric Project where an investment of over Nu/INR 69 billion will be made to develop the project.
Meanwhile, Tata Power Company Limited is a leading integrated power company and a part of the Tata Group, India’s largest multinational business conglomerate, owns a diversified portfolio of 15.2GW.
DGPC is a subsidiary of Druk Holding and Investments Limited, the sole generation utility in Bhutan. It was formed in December 2007 to develop and manage Bhutan’s hydropower resources and assets.
DGPC has a portfolio of 2453 MW of Hydro capacity in Bhutan, a large percentage of which is being exported to India especially during the monsoon months. DGPC is envisioned to achieve 5,500 MW Hydro capacities within the next 5 years timeline including investments and development of Small Hydro and solar Projects.
With the growing portfolio of hydropower plants and consolidation of its ventures into hydropower investigation, design and engineering, construction, automation, and consultancy services, DGPC has established a diversified team of professionals at various levels.
On the occasion, Prime Minister (PM) Dasho Tshering Tobgay wrote in his social media page that energy is the driver of growth, and that today “Bhutan takes another leap forward in strengthening our energy security and regional integration.” “The signing of the Memorandum of Understanding between Druk Green Power Corporation and Tata Power Company Limited marks a historic partnership to develop 5,000 MW of clean energy capacity in Bhutan,” the PM has said.
The PM has also underlined that this collaboration speaks to our shared vision of creating a sustainable future for Bhutan, India, and the region. “It will harness Bhutan’s immense renewable energy potential – 4,500 MW of hydropower and 500 MW of solar energy – while driving economic growth, creating green jobs, and diversifying our energy portfolio. On Bhutan’s part, we will leave no stone unturned to ensure the success of this partnership, as it is not just about energy generation but also about building a resilient economy, ensuring long-term energy security, and making Bhutan a vital player in regional energy integration.”
The PM has written that as Bhutan fast-tracks the aspirations to achieve 20 GW of generation capacity by 2040, partnerships like these reaffirm Bhutan’s commitment to sustainable development and mutual prosperity with our neighbors. “This is a proud moment for us, and I am confident that together we will turn this vision into reality.”
Bhutan is richly endowed with renewable hydropower resources, with an estimated potential of 36,900 MW and an annual production capacity of 154,000 gigawatt hours (GWh). The country is embarking on an ambitious energy transformation over the next 15 years, targeting an additional 15,000 megawatts (MW) of hydropower and 5,000 to 6,000 MW of solar energy to complement its existing capacity.
With 2,500 MW of hydropower already operational and another 3,000 MW under construction, Bhutan aims to reach a total installed capacity of 30,000 MW by 2040.
Achieving this vision will require substantial investment—estimated at USD 26 billion (B), translating to an annual funding requirement of USD 1.5 to 1.6B. This is an ambitious target, considering Bhutan’s GDP stands at approximately USD 3B.
Currently, Bhutan’s installed hydropower capacity represents only 8 percent of its vast potential.
Sherab Dorji from Thimphu
