The Royal Government of Bhutan and the World Bank have signed financing agreements worth $515 million for the 1,125 MW Dorjilung Hydroelectric Power Project, which will become Bhutan’s largest hydropower project and a cornerstone of its 13th Five‑Year Plan. Developed under a public‑private partnership, the project will supply clean electricity, boost economic growth, and reinforce Bhutan’s carbon‑negative commitment.
Located on the Kurichhu River in eastern Bhutan, the project will generate over 4,500 GWh of electricity annually, helping close seasonal energy gaps and enabling surplus exports to India. It is expected to raise Bhutan’s GDP by 2.4%, create jobs, and support industries such as manufacturing and tourism through reliable power. Regionally, it will displace 3.3 million tons of CO2 each year and strengthen clean energy trade.
The financing model combines public and private capital, minimizing Bhutan’s sovereign borrowing while catalyzing additional private investment. The World Bank Group has approved $300 million in concessional financing from IDA, $215 million from IBRD, and up to $300 million from IFC. The project is structured through Dorjilung Hydro Power Limited, jointly owned by Bhutan’s Druk Green Power Corporation and India’s Tata Power, deepening regional energy cooperation.
Officials emphasized that the project will provide grid flexibility, reduce energy import costs, and expand export revenues, while adhering to rigorous environmental standards. Tata Power highlighted that nearly 80% of the electricity generated will be exported to India, meeting peak demand and strengthening regional energy security.
With an estimated cost of $1.7 billion, the project’s innovative financing structure ensures Bhutan’s direct credit exposure remains limited, while revenues from taxes, free power, and dividends are projected to reach about $4 billion over 30 years. The signing ceremony, attended by Bhutanese leaders and World Bank representatives, marked a milestone in advancing sustainable infrastructure and energy security for Bhutan and the wider South Asia region.
