In a significant turnaround in the long-drawn negotiations over Bhutan’s 570 MW Wangchu hydropower project, the Adani Group has agreed to take a 49% stake, in line with government policy, leaving the Druk Green Power Corporation (DGPC) with the majority share.
The shift in terms marks a clear departure from the earlier proposal made by Adani, which had called for a 70% stake along with a 90-plus year concession period. The revised agreement now stipulates a 30-year concession period, with a possible five-year extension, as offered by DGPC.
According to sources close to the negotiations, the current discussions are centered on technical parameters. The Adani Group is set to conduct a thorough review of the project’s Detailed Project Report—a routine process that typically lasts two to three months. This technical review will also explore the possibility of converting the run-of-the-river 570 MW project into a 900 MW reservoir scheme.
Financing negotiations are expected to follow once the technical aspects are finalized. Earlier discussions in October 2024 had explored the creation of a Special Purpose Vehicle (SPV), which would allow DGPC to maintain its majority stake. However, regulatory challenges emerged since Indian rules do not permit SPVs in the power sector, although such structures are allowed in other areas. Alternatives, including registering the SPV in a third country such as Singapore, are under consideration.
The breakthrough comes after initial setbacks following a tweet from Gautam Adani on 15 June 2024, in which he confirmed the signing of an MoU with DGPC for the Wangchu Hydropower Plant. The MoU was based on the understanding that while Adani would secure a significant investment role, DGPC would retain majority ownership. Subsequent demands for a larger stake had jeopardized the deal, but the parties have now realigned their positions.
Industry experts suggest that while the technical and financial reviews remain to be completed, this development sets a positive tone for the future of the project. As the Adani Group and DGPC navigate the remaining hurdles, the energy sector is watching closely, anticipating how the project might evolve and what this could mean for cross-border investments in strategic infrastructure.
