In a bold move to accelerate its transition toward a digital economy, the Royal Government of Bhutan has announced plans to develop a USD 450 million hyperscale data center by 2034. The project, a cornerstone of the country’s digital transformation strategy, is expected to significantly boost GDP contribution, generate high-value jobs, and position Bhutan as a digital hub in South Asia.
Over the past few years, Bhutan’s Information and Communications Technology (ICT) industry has contributed more than 3% to the national GDP. With the new data center initiative, the government envisions a substantial rise in this figure as digital infrastructure becomes a key economic driver.
Officials say the hyperscale data center will serve as a foundation for diversifying the economy and attracting foreign direct investment (FDI). By providing secure and sustainable cloud services, Bhutan hopes to draw regional and global tech players while increasing foreign exchange earnings.
However, experts caution that the success of the project will depend on addressing several key challenges. Bhutan’s limited internet connectivity remains a bottleneck, and the high cost of international bandwidth could deter large-scale investors. Additionally, there are concerns about potential strain on the country’s hydropower resources—the backbone of its clean energy supply—and the current shortage of skilled IT professionals.
To overcome these hurdles, policymakers are calling for the creation of a National Data Centre Strategy, focused on strengthening internet infrastructure, expanding fiber networks, and fostering digital skills through education and training programs. Lowering international bandwidth costs will also be critical to ensuring the project’s competitiveness in the regional data hosting market.
Potential locations for the data center are expected to be areas with strong hydropower capacity and reliable fiber connectivity—an approach that aligns with Bhutan’s commitment to green and sustainable development.
If successfully implemented, the hyperscale data center could mark a turning point for Bhutan’s economy, transforming it from an energy exporter into a regional digital powerhouse.
