10,000 MW by 2020 target to be reviewed by government

An open secret of the Bhutan’s hydropower sector is finally out, as it is increasingly unlikely that Bhutan will be unable to achieve the ambitious target of 10,000 MW by 2020.

According to a reliable and senior source, the Ministry of Economic Affairs (MoEA) is in the process of developing a strategy or way forward plan for the cabinet to review the 10,000 MW by 2020 target, and also look at meeting the challenge getting finances for the projects.

According to the source, there is a high probability that the government will formally decide to change the 2020 target, as it now looks next to impossible. The government will also look at the issue of financing of future projects like Sunkosh and Kuri Gongri as well as the status of the Amochu reservoir project.

The government will also review if it is feasible or advisable at all to go ahead with mega projects like Sunkosh and Kuri Gongri in the face of financing and capacity issues. It is estimated that Sunkosh itself will require around Nu 220 to 230 bn and Kuri Gongri would also not be far behind.

All of this is happening as a result of discussions in the recent Empowered Joint Group (EJG) meeting in Delhi, attended by Bhutanese officials lead by the MoEA minister Lyonpo Norbu Wangchuk. The meeting saw the Indian side talking about financing difficulties for the remaining bilateral projects of Sunkosh and Kuri Gongri. The meeting jointly decided that they would go back and look at revisiting and revising the 2020 target and also look at various financing issues and other options on the remaining projects.

There was also security concerns raised on the Amochu project. An official said previous hydropower meetings between both sides had never involved security personnel and perspectives, and so they had not been made aware of any security issues which are now emerging.

The senior official in the know said that financing concerns were actually nothing new as it had always been a concern from the time 10,000 MW had been announced.

The Tala project when it was constructed in 2006 was the Indian government’s largest ever foreign investment ever coming to around 1 bn USD at the time with 60 percent grant and 40 percent loan at nine percent.

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