Bhutan Embarks on Major Hydropower Venture with Indian Partnership

Bhutan is set to advance its renewable energy ambitions with the groundbreaking of the highly anticipated 600 MW Khorlochhu Hydropower Project, scheduled to commence in November 2024. This significant development follows the recent signing of a pivotal Shareholders’ Agreement between Druk Green Power Corporation (DGPC) and Tata Power Trading Company (TPTC) on October 25, 2024, in Mumbai, India.

Under the terms of this strategic alliance, DGPC will secure a 60 percent equity stake in the project, while Tata Power will contribute the remaining 40 percent. The total investment for the project is estimated at Nu 70 billion, inclusive of financing charges, with construction expected to span five years.

Dasho Chhewang Rinzin, Managing Director of DGPC, highlighted the comprehensive nature of the partnership. “The Joint Venture has successfully finalized a Power Purchase Agreement with Tata Power Trading Company to export surplus electricity generated during the summer months to India. Additionally, we have secured a PPA with Bhutan Power Corporation to supply electricity to our domestic market,” Rinzin stated.

Further solidifying the project’s foundation, the concession agreement between the Bhutanese government and Khorlochhu Hydropower has been finalized and is anticipated to be signed imminently. “With the Shareholders, Power Purchase, and Concession Agreements in place, we are poised to initiate construction activities by November 2024,” Rinzin affirmed.

In alignment with the strategic partnership, contractors have been mobilized to begin civil works at the project site. Jai Prakash Associates has been appointed as the principal contractor for the dam and powerhouse construction, while the Valecha-Rigsar Joint Venture and Construction Development Corporation Limited (CDCL) will oversee the headrace tunnel development.

To ensure the project’s success, DGPC is actively recruiting a design engineering consultant and a project management consultant to enhance the oversight and execution of construction activities. “Strengthening our team is crucial as we move forward with this ambitious project,” Rinzin added.

In a move to diversify Bhutan’s energy sources, DGPC and TPTC have agreed to import an initial 50 MW of solar power for the 2024-2025 winter season through a bilateral arrangement. This initiative aims to reduce Bhutan’s reliance on power purchases from Indian energy exchanges, with expectations for bilateral solar power trade to grow in the future.

Expanding its commitment to sustainable energy, DGPC also signed a Memorandum of Understanding with GMR Energy Ltd on October 24, 2024. This agreement explores a strategic partnership aimed at achieving Bhutan’s ambitious target of adding 15,000 MW in hydropower and 5,000 MW in solar generation capacity by 2040.

The Khorlochhu Hydropower Project represents a significant milestone in Bhutan’s journey towards energy self-sufficiency and sustainability, reinforcing the nation’s role as a key player in the regional renewable energy landscape.

Total
0
Shares
Related Posts