The Royal Government of Bhutan and the World Bank on May 7 signed financing agreements worth $515 million for the 1,125 MW Dorjilung Hydroelectric Power Project, a landmark infrastructure initiative expected to transform Bhutan’s economy and strengthen regional clean energy cooperation. The project, located on the Kurichhu River in eastern Bhutan, will generate over 4,500 GWh of electricity annually and contribute nearly one-third of Bhutan’s total power generation capacity.
Bhutan Prime Minister Tshering Tobgay said the project is a key pillar of Bhutan’s 13th Five-Year Plan and the country’s largest hydropower venture under a public-private partnership model. The estimated $1.7 billion project is expected to increase Bhutan’s GDP by 2.4 per cent, create jobs, boost manufacturing and tourism, and generate long-term revenues through electricity exports to India.
The financing package includes $300 million from the International Development Association (IDA), including a $150 million grant, and $215 million from the International Bank for Reconstruction and Development (IBRD). The project also involves Bhutan’s Druk Green Power Corporation and Tata Power, which holds a 40 per cent stake in the special purpose vehicle developing the project.
Officials said nearly 80 per cent of the project’s annual electricity generation will be supplied to India, helping meet rising peak summer demand while strengthening regional energy security and reducing carbon emissions by around 3.3 million tonnes annually.
