The Bhutanese Leading the way.
Hydropower has been the cornerstone of Bhutan’s economic development. Today, it contributes 41 percent of national income and approximately 13 percent of GDP, making it one of the most important export sectors in the country.
Beyond the revenue, it generates, hydropower has enabled industrial growth, supported infrastructure development, and ensured electricity access even in the most remote mountain communities, helping preserve Bhutan’s environment.
This remarkable achievement traces back to the vision of His Majesty The Fourth Druk Gyalpo Jigme Singye Wangchuck, who prioritized hydropower as a national development strategy from the early years of his reign. His foresight laid the foundation for Bhutan’s collaboration with India and the establishment of large-scale hydropower projects.
Reflecting on this legacy, Lyonpo Khandu Wangchuk, who served in the Council of Ministers and as a Prime Minister of the country from 2001 to 2002, said, “There were some small hydropower plants before. There was one at Jungzhina and one at Gida in Thimphu and one at Paro and another at Wangdue Phodrang, but these were all very small projects and could only be used domestically within the dzongkhags since the projects ranged from 200-300 kW.”
He said, “The first big plan His Majesty set up was the Chukha Hydropower Plant in the mid-70s. We need to keep in mind that His Majesty came to the throne in 1972. He worked with the Government of India. His Majesty must be given the credit for establishing this collaboration in hydropower with India, which has been very fruitful.”
Lyonpo Khandu Wangchuk further added, “Chukha is 336 MW and it took us over 10 years to complete. Towards the end of the 80s Chukha was completed. In the 90s, the Tala and the Kurichhu projects were started, and by 2005 and 2007, we completed the projects. I chaired the Tala project starting from 1998 to 2003. After Chukha, Kurichhu, and Tala, His Majesty then initiated the Punatsangchhu I and II and Mangdechhu. One of the biggest things we need for hydropower is a market, and India has been buying from us and is very beneficial. We could have paid off the Tala loan in 3-4 years but we needed some revenue for our development as well. That is why we staggered the repayment to 10-12 years.”
He said, “Today 41percent of our income is from power and it contributes 13 percent to the GDP. Without hydropower, we can’t preserve our environment and because of the reliable power we have, industries came up and also the rupees we gain from hydropower.”
He also said, “Because of His Majesty’s hydropower policies and establishment, today in the region, we are the only country providing electricity for all. Even in the mountain tops where you see a temple or a house, there is power access, and even though it is very expensive, we still have power for all. We are the only country exporting electricity in the region.” Lyonpo Khandu Wangchuk concluded, “His Majesty was present in everything. He talked to the Government of India, ensured that agreements were signed, and was very closely involved. Very often during the Chukha Hydropower Project, His Majesty had to go to Delhi and talk with the Government of India regarding matters of tariff.”
The Chukha Hydropower Project, Bhutan’s first mega power project, was commissioned in 1986 and became operational between 1986 and 1988. Prior to Chukha, Bhutan’s first hydroelectric plant was a smaller 360 kW facility built in 1967 in Thimphu, serving only the capital city. Chukha, with a capacity of 336 MW, marked the beginning of large-scale hydropower development in the country. The project was fully funded by the Government of India, with 60 percent grant and 40 percent concessional loan at 5 percent interest, payable over 15 years after commissioning. It was formally inaugurated on 21 October 1988 by the then President of India, R. Venkataraman, in the presence of His Majesty the Fourth King Jigme Singye Wangchuck.
Chukha played a pivotal role in generating revenue for the country through the export of surplus electricity to India and laid the foundation for subsequent projects such as the Tala Hydroelectric Project, Kurichhu, Punatsangchhu I and II, and Mangdechhu.
These projects strengthened Bhutan’s economy, energy security, and export capacity. The success of Chukha also inspired further cooperation with India, including agreements in 2006, 2008, and 2014, and the establishment of joint ventures like Kholongchhu, Wangchu, and Chamkarchu with Indian companies.
Today, hydropower remains Bhutan’s most significant economic driver, exporting over Nu 19 billion worth of electricity and supporting sustainable development, demonstrating the enduring legacy of His Majesty The Fourth Druk Gyalpo’s vision in transforming Bhutan into a hydropower powerhouse.
