Dorjilung Project advances with key works underway as financial closure expected by December

Over 85 percent of access roads and bridges completed

The Dorjilung Hydroelectric Power Project (DHPP) has made significant progress, with more than 85 percent of the construction of access roads and bridges completed, while financial closure is expected by December 2026. The construction of access roads and bridges was awarded to two local contractors on 28th July  2025.

To further expedite the project, preconstruction works including the construction of diversion tunnels, cable access tunnels and Adit 4 to the head race tunnel were awarded to M/s. Patel Engineering Limited and Rigsar Construction Pvt. Ltd. Both contractors have completed the mobilization of all critical resources and have commenced work at the project site. The project has secured all the required approvals and clearances.

Regarding financing, the World Bank Group approved a USD 815 million financing package for the project on 22nd January 2026. The International Finance Corporation (IFC) has been appointed as the lead arranger and has already initiated market sounding. Potential Indian financial institutions have also been identified. The project expects to achieve financial closure in December 2026. The project’s zero date will begin once the Main Civil Packages are awarded. The request for bids for the Main Civil Packages was issued on 13th June 2026. To attract potential bidders, a roadshow was held in Mumbai, India, on 29th June 2026. The latest timeline for the completion and commissioning of the project is 60 months from the award of the Main Civil Packages.

During the construction period, the project is expected to generate between 4,000 and 5,000 direct and indirect jobs on average. During the operation phase, it is expected to provide between 300 and 400 jobs. Once completed, the DHPP will generate more than 4,500 GWh of clean electricity annually, with expected revenues of about Nu 25 billion each year. The project is expected to help close Bhutan’s seasonal energy gap during the winter months while providing surplus electricity for export to India during the summer and monsoon seasons. It is also projected to increase Bhutan’s GDP by 2.4 percent.

The DHPP is a key component of Bhutan’s national energy strategy and is expected to contribute significantly to the country’s long-term goal of achieving 25,000 MW of installed hydropower capacity by 2040. By mobilizing private capital through a public-private partnership model, the project is expected to strengthen Bhutan’s transition to a more sustainable hydropower financing model, enhance energy security and reinforce Bhutan’s position as a reliable clean energy exporter in the region.

According to the Ministry of Energy and Natural Resources (MoENR), no major challenges or delays have affected the implementation of the project so far. Even before the World Bank Group approved the financing package and before financial closure, Druk Green Power Corporation and its strategic partner, Tata Power Company Limited, had already started the construction of access roads, construction power infrastructure and pre construction works through equity injection.

The ministry has also facilitated the timely issuance of environmental and forestry clearances, construction and business licenses, and provided the necessary support for land acquisition and leasing. These measures have helped prevent potential delays. To ensure that the project is completed on schedule and within budget, the Detailed Project Report, originally prepared in 2015, was comprehensively updated in 2024. The revised report updated the project cost, reworked the implementation schedule and included additional investigations and tests to strengthen the project’s technical and financial foundation.

Construction of access roads and the construction power line to all project components is also underway to ensure uninterrupted work for the Main Civil Packages and enable the timely mobilization of contractors.

The project has also started pre-construction works during the period between the preparation of the main bidding documents and the award of the Main Civil Packages to shorten the overall construction period. To support contractors, the project is arranging basic construction equipment and accommodation facilities to enable them to begin work without delay.

In addition, a comprehensive risk register has been prepared to identify potential risks and implement mitigation measures aimed at minimizing schedule delays and cost overruns. A risk workshop is also being planned to update the risk register prepared during the Detailed Project Report update so that emerging risks can be identified and addressed in a timely manner.