Advancing Hydropower Ambitions with Nu 16.8 Billion Contract Signing

In a bold move towards enhancing its renewable energy portfolio, Khorlochhu Hydro Power Limited (KHPL) inked deals worth Nu 16.8 billion during its first extraordinary general meeting held in Trashiyangtse yesterday. The agreements, executed with Jaiprakash Associates Limited (JAL) and Construction Development Corporation Limited (CDCL), pave the way for the construction of a 600 MW dam and powerhouse that is expected to significantly contribute to Bhutan’s energy landscape.

The landmark project—a joint venture between Druk Green Power Corporation (DGPC) and Tata Power Company Limited (TPC)—saw KHPL’s board not only finalizing major contracts but also approving key appointments including the Chief Executive Officer and Chief Finance Officer. These strategic decisions come as the project gears up for a fast-approaching construction phase with preparatory works already well underway.

Breaking Down the Contracts

According to Karma Tshering, Secretary of the Ministry of Energy and Natural Resources (MoENR), the contracts executed cover three major segments of the hydropower project. JAL has been granted the dam construction contract valued at Nu 9.7 billion, while the powerhouse works—totaling Nu 4.99 billion—have been divided between JAL and CDCL. In adherence to the commitment of promoting local enterprises, CDCL will handle 20 percent of the powerhouse works, amounting to Nu 1.2 billion. In addition, a contract worth Nu 873 million for the supply of aggregates and crushed sand was awarded to the State Mining Corporation of Bhutan.

These contracts, together with the previously awarded headrace tunnel deal (valued at Nu 4.346 billion in 2021), underscore the project’s expansive scale and meticulously planned roadmap, which includes rigorous timelines and an estimated total cost of Nu 69 billion.

On-Site Preparations and Future Milestones

The momentum behind the project was further bolstered by a site visit on January 9, where board members and shareholders confirmed that both JAL and CDCL had already mobilized resources and initiated preparatory work for the dam, powerhouse, and headrace tunnel constructions. With the majority of groundwork completed, contractors are now primed to commence full-scale construction immediately.

The board has urged the contractors and management to finalize a robust construction schedule, ensuring the project’s timely completion. Parallelly, KHPL management has been tasked with accelerating the recruitment of design and project management consultants, as well as initiating contracts for critical electro-mechanical and hydro-mechanical works.

Long-Term Vision and Regional Impact

Upon commissioning in 2029, the hydropower project is expected to produce approximately 2,524 MU annually. While Bhutan will primarily harness the energy generated during the winter months, surplus power produced in the summer season is set to be sold to Tata Power Trading Company Limited, a TPC subsidiary. This strategy is a significant step towards realizing Bhutan’s ambitious target of achieving an additional 15,000 MW of hydropower alongside 5,000 MW of solar power capacity by 2040.

Furthermore, ongoing discussions between DGPC and TPC hint at the start of consultations for the 1,125 MW Dorjilung hydropower project, signaling a continued commitment to sustainable energy development in the region.

As Bhutan strides confidently towards a future powered by renewable energy, the Khorlochhu project stands out as a pivotal milestone, combining strategic partnerships, substantial financial investments, and a comprehensive vision for the nation’s energy security and economic growth.

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