Bhutan is in the final stages of negotiations with India to set the export tariff for electricity from the 1,020-megawatt Punatsangchhu Hydropower Project-II (PHPA-II). Officials from the Ministry of Energy and Natural Resources (MoENR) indicated that the tariff is expected to fall between Nu 5.5 and Nu 6 per unit.
Technical-level talks have already made significant progress, with discussions now poised to move to the Joint Technical Team and Power Secretary levels. Once the tariff and the Power Purchase Agreement (PPA) are finalized, the project could begin exporting electricity as early as next month — pending necessary internal approvals.
The PHPA-II, a major India-backed infrastructure initiative, has been meeting Bhutan’s domestic electricity needs since commencing operations in December 2024. In that time, it has generated Nu 820 million in revenue through domestic power sales. The export tariff will be determined based on project costs, financing charges, operational expenses, and prevailing market conditions.
The project marks another milestone in Bhutan-India hydropower cooperation, underscoring the long-standing energy partnership between the two nations. Once exports begin, PHPA-II is expected to further strengthen regional energy security and contribute significantly to Bhutan’s revenue base.
