The 10,000 MW commitment

In 2008, the then Indian Prime Minister Manmohan Singh made an important commitment of 10,000 MW by 2020, following up on an earlier 5,000 MW agreement in 2006. Subsequently agreements were signed between Bhutan and India in 2009 identifying 10 projects.

Of the 10 projects six which formed the bulk of the 10,000 MW were selected on the Inter-Governmental model similar to Chukha and Tala while four were identified as Joint Ventures where Indian government companies would have joint ownership for around 30 years.

It is important to remember here that the four JV’s were agreed to as part of a larger 10,000 MW deal otherwise Bhutan would not have given up half the ownership of its 4 projects.

However, problems soon started thereafter as Indian bureaucrats complained of the high cost of the projects. As a result the earlier 60 percent grant and 40 percent loan of Tala and the 40 percent grant and 60 percent of loan for Punatsangchu I got changed to 30 grant and 70 loan for all projects from Punatsangchu II onwards.

Bhutan accepted this in 2009-10 with the hope that the larger 10,000 MW target was worth it even though the financial burden would increase on Bhutan.

There were even more changes coming up in the 10,000 MW by 2020 commitment as Amochu was dropped due to security reasons and there was no movement on the 2,560 MW Sunkosh and 2,640 MW Kuri Gongri projects.

In another twist to the 10,000 MW saga there is information that there is now a funding issue and proposals have been made to change the IG model of the two vital projects for Bhutan.

Meanwhile, in part because it is new, but in part due to the inability of Indian PSU’s to follow the IG spirit, strong demands were placed on the JV projects which eventually got moderated down but problems still exist.

Bhutan and India have both benefitted from past hydropower cooperation. Fulfilling the 10,000 MW commitment, which has time and again been reaffirmed by GoI will not only lead to mutual benefit but will also take our relations to a new high. The ball is currently in GoI’s court.

“One hand washes the other” 

Seneca

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