Bhutan Hydropower Project with Tata Power

The Bhutan hydropower project has emerged as a critical development in regional affairs with the launch of the Dorjilung Hydropower Project—a joint venture between Bhutan’s Druk Green Power Corporation (DGPC) and India’s Tata Power Company Limited.

This initiative marks a strategic transformation in regional clean energy collaboration, introducing private sector investment in Bhutan hydropower at this scale.

Project Overview: Dorjilung Hydropower Project Details

The Dorjilung Hydropower Project is a run-of-the-river scheme located on Bhutan’s Kurichhu River. It aims to generate 1125 MW of electricity, significantly contributing to the Bhutan hydropower project ecosystem.

• Location: Mongar and Lhuentse districts

• Dam Type: Concrete-gravity

• Height: Approximately 139.5 meters

• Water Flow: ~287 cubic meters per second

• Tunnel Length: 15 kilometers

• Powerhouse: Underground, housing six Francis turbines

• Annual Output: About 4.5 terawatt-hours

This project enhances Bhutan’s capacity in hydropower construction, adding to its reputation as a Himalayan hydropower project hub.

Financial Model: Investment-Based Development

The Bhutan hydropower project takes a significant departure from the traditional model of government grants and aid. Instead, it is being financed by the World Bank, highlighting a shift toward investment-based funding.

• Total Estimated Cost: $1.7 billion (~₹150 billion)

• Initial Civil Works: Access roads and bridges by Chimi RD Construction and KD Builders

• Combined Contract Value: ₹479 million

This model strengthens Bhutan’s energy sector and opens doors for global financing in similar future projects.

India-Bhutan Partnership: Role of Tata Power

The partnership between DGPC and Tata Power Bhutan symbolizes a new era of private sector collaboration in hydropower. It is part of a larger roadmap to develop 5000 MW of clean energy capacity in Bhutan.

Other projects under this partnership include:

• Gongri Reservoir

• Jeri Pumped Storage

• Chamkharchhu IV

• 500 MW solar energy projects by Tata Power Renewable Energy Limited

This cooperation not only expands the Bhutan hydropower project portfolio but also supports India's goals in power generation and renewable energy expansion.

Strategic Importance of the Bhutan Hydropower Project

The Bhutan hydropower project is more than just an energy project—it is a strategic instrument for:

• Reducing Bhutan’s dependence on grants and credit lines from India

• Facilitating business-to-business infrastructure deals

• Promoting clean energy across the Himalayas

• Strengthening India’s energy security with stable imports

• Deepening bilateral relations through shared infrastructure

This is a strong case of energy diplomacy, especially in the context of regional stability and mutual growth.

Regional Hydropower Cooperation

Under the 2006 India-Bhutan Bilateral Hydropower Agreement, four major projects (totaling 2136 MW) are already supplying electricity to India. What makes the Dorjilung Hydropower Project unique is its:

• Private sector equity involvement

• World Bank funding for Bhutan hydropower

• Long-term business-focused structure

Compared to Nepal, where geopolitical tensions hinder hydropower investments, Bhutan's balanced foreign policy allows smooth project execution. This enhances its reputation as a trusted partner in clean energy development.

Future of the Bhutan Hydropower Project

In the coming months, civil works for dam construction, boreholes, and tunnels will begin.

The project is expected to:

• Boost the local economies of Mongar and Lhuentse

• Provide employment and upskilling opportunities

• Advance the Bhutan renewable energy development roadmap

• Position Bhutan as a regional leader in clean energy infrastructure

These developments show that the Bhutan hydropower project is a long-term strategic investment that serves both environmental and economic interests.

Final Thoughts

The Bhutan hydropower project marks a turning point in the region's clean energy transition. With World Bank financing and private sector involvement from Tata Power, Bhutan is moving beyond traditional aid models and embracing investment-driven development. This initiative not only enhances Bhutan’s energy infrastructure but also contributes to India’s long-term energy security through stable, renewable imports.

The Dorjilung project, with its 1125 MW capacity, is a model for sustainable, cross-border energy cooperation. It reflects a growing trend toward shared infrastructure, economic diplomacy, and climate-conscious growth.

As more such projects emerge, the Himalayan region’s role in global clean energy will become increasingly vital.