In a significant move towards bolstering energy security in the region, Druk Green Power Corporation (DGPC) and Tata Power have announced a strategic partnership to develop the 600 MW Khorlochhu Hydropower Project in Bhutan. This ambitious venture, previously known as the Kholongchhu Hydropower Project, is set to enhance both nations’ clean energy capabilities.
The agreement was officially signed on July 29, 2024, in Mumbai, India, by Dr. Praveer Sinha, CEO and Managing Director of Tata Power, and Dasho Chhewang Rinzin, Managing Director of DGPC. Under this partnership, DGPC will hold a 60 percent equity stake, while Tata Power will invest the remaining 40 percent. The total cost of the project, including financing charges, is estimated at approximately Nu 70 billion, with construction expected to span five years.
Dr. Praveer Sinha emphasized the significance of this collaboration, calling it a landmark alliance for both companies. “The development of the Khorlochhu Hydropower Project in Bhutan will provide energy security to the region. This project marks a significant step towards building a sustainable energy landscape, underscoring Tata Power’s commitment to a greener future,” he stated.
Dasho Chhewang Rinzin echoed these sentiments, highlighting the project’s importance for Bhutan’s energy security and economic development. “This strategic partnership with Tata Power to develop the Khorlochhu Hydropower Project is a significant step towards Bhutan’s energy security and economic development as the country seeks to become a high-income GNH economy by 2034,” Rinzin said. He noted that the project opens new avenues for sourcing investments to harness Bhutan’s vast hydropower and solar potential.
The collaboration between DGPC and Tata Power is not their first; the two companies previously partnered on the 126 MW Dagachhu Hydropower Plant in Bhutan. Building on this successful partnership, the Khorlochhu project aims to further strengthen the clean energy collaboration between India and Bhutan. With support from both governments, all statutory approvals are in place for construction to begin immediately.
Once operational, the Khorlochhu Hydropower Project will meet Bhutan’s growing winter electricity needs and support India’s increasing power demands during the summer. Khorlochhu Hydropower Limited, the entity formed for this project, will enter into long-term Power Purchase Agreements with Tata Power Trading Corporation Limited for exporting surplus power to India during the summer and with Bhutan Power Corporation Limited for domestic sales in the winter.
Additionally, Tata Power has a successful joint venture with Power Grid Corporation of India Limited for a 1,200 km long transmission line, which brings electricity from Bhutan to Delhi. This project aligns with Bhutan’s ambitious goal of achieving 20 GW of hydropower generation capacity by 2040.
Dasho Chhewang Rinzin expressed hope that this partnership would serve as a model for future collaborations. “DGPC hopes to not only build on this partnership with Tata Power but also emulate similar partnerships with other interested partners,” he said.
This strategic investment underscores Tata Power’s commitment to sustainable initiatives, striving towards carbon neutrality and providing alternative clean energy to India. The project is a testament to the growing synergy between India and Bhutan in the clean energy sector, paving the way for a more sustainable and secure energy future for both nations.
