The Bhutanese Leading the way.
The 1,125 Megawatt (MW) Dorjilung Hydropower Project (DHPP) is on track for completion by 2032, following technical clearance from the Ministry of Energy and Natural Resources (MoENR) to Druk Green Power Corporation (DGPC) in February this year, with the preparatory works expected to begin in June 2025.
The project, located in the eastern region, is expected to be completed in 78 months, which includes 18 months of preparatory work and 60 months of main construction activities. The implementation of the project will be led by DGPC.
DGPC is expected to begin preparatory work in June 2025, setting the project on track to meet the planned 78-month timeline.
One of the key activities slated for June 2025 is the commencement of construction for roads and bridges. In the third quarter of 2025, a design consultant will be hired, and by the fourth quarter, the corporation is expected to invite bids for the main construction packages.
The World Bank has, in principle, committed to providing some funds through the International Development Association (IDA) to Bhutan, which will be provided to DGPC for further infusion to SPV as equity.
To support the financial structure for DHPP, the World Bank is proposing a strategic mix of IDA, International Bank for Reconstruction & Development (IBRD), and International Financing Corporation (IFC) to take advantage of concessional resources, financial instruments and private sector expertise.
The project is expected to raise extra commercial finance in addition to Tata Power’s equity portion. Since the energy will be exported to India in Indian Rupees, the strategic partner being an Indian company and to leverage the India-Bhutan partnership, the balance fund required is to be sourced from Indian financial institutions and commercial banks to obtain a competitive financing package in terms of both price and maturity.
In November 2024, DGPC signed an MoU with Tata Power Company Limited for the joint development of the project under a Public-Private Partnership (PPP) model. A Special Purpose Vehicle (SPV) will be created, with DGPC holding 60% and Tata Power 40%.
Tata Power’s involvement is expected to facilitate financing from Indian institutions and help streamline electricity exports to India.
With construction set to begin mid-2025 and a carefully structured timeline in place, the Dorjilung Hydropower Project is expected to be commissioned by early 2032.
