In a landmark collaboration, Tata Power Company Ltd, one of India’s largest integrated power firms, has joined forces with Druk Green Power Corporation (DGPC) to develop at least 5,000 MW of clean energy capacity in Bhutan.
This partnership aims to enhance regional energy security while supporting the transition to renewable energy in both Bhutan and India.
The partnership is in line with Bhutan’s vision to expand its total energy generation capacity to 25,000 MW by 2040.
Bhutan aims to achieve this goal by diversifying its energy portfolio beyond traditional hydropower to include solar and geothermal energy while exploring innovative project structures and financing through strategic partnerships.
The Memorandum of Understanding (MoU) was signed yesterday in Thimphu between the Managing Director of DGPC, Dasho Chhewang Rinzin, and Tata Power’s Chief Executive and Managing Director, Dr Praveer Sinha.
The ceremony was attended by Bhutan’s Prime Minister Tshering Tobgay, Minister for Energy & Natural Resources Gem Tshering, Chairman of Tata Sons Natarajan Chandrasekaran, India’s Ambassador to Bhutan Sudhakar Dalela, and senior officials from both countries.
Through this partnership, at least 5,000 MW of renewable energy projects will be developed in phases, including 4,500 MW of hydropower projects such as the 1,125 MW Dorjilung Hydropower Project, 740 MW Gongri Reservoir, 1,800 MW Jeri Pumped Storage, and 364 MW Chamkharchhu IV.
Tata Power Renewable Energy Limited (TPREL), a subsidiary of Tata Power, will also lead the development of 500 MW of solar projects across Bhutan.
Tata Power has also undertaken the transmission project for the 1,200 km Tala transmission line, which evacuates clean power from Bhutan to India.
Lyonchhen Tshering Tobgay emphasised the significance of this partnership for Bhutan’s energy future. “Bhutan currently generates only 2,444 MW, about 7.5 percent of its potential. However, this agreement to develop 5,000 MW brings us closer to His Majesty’s vision of generating 20,000 MW,” he said.
The chairman of Tata Sons, Natarajan Chandrasekaran, expressed gratitude for being part of His Majesty’s transformative vision, adding that Tata Group sees significant opportunities to engage in Bhutan’s hospitality, power, and renewable energy sectors.
Dr Praveer Sinha said that said that the partnership will help shape a new energy era for the region. “Together, we are building 5 GW of clean energy capacity that will harness Bhutan’s hydropower potential and support the growing energy demands of both countries with a reliable and sustainable energy supply.”
DGPC MD Dasho Chhewang Rinzin said that this collaboration aligns with Bhutan’s aspirations to maximise benefits for its people by fast-tracking the development of renewable energy resources to achieve economic development and long-term energy security. “Bhutan places immense confidence in Tata Power and this partnership to deliver on these expectations.”
With Bhutan’s economy projected to grow by 7.2 percent in fiscal year 2025, its energy requirements are expected to rise significantly. Hydropower remains a cornerstone of Bhutan’s economy, and capitalising on this resource will not only meet the country’s growing energy demands but also create green jobs and contribute to infrastructure development.
Tata Power and DGPC have a long-standing relationship, beginning in 2008 with the joint development of Bhutan’s first public-private hydropower partnership—the 126 MW Dagachhu Hydropower Plant.
More recently, Tata Power acquired a 40 percent stake in the 600 MW Khorlochhu Hydroelectric Project, valued at INR 8.30 billion.The project will involve an investment of over INR 69 billion.
Tata Power has built a clean and green energy portfolio exceeding 12.9 GW (6.4 GW operational and 6.5 GW under construction), constituting 42 percent of its total capacity. The company aims to expand this to 70 percent by 2030.
Meanwhile, the construction of the Khorlochhu project, which marks a significant milestone in the partnership, began yesterday with the first blasts at the powerhouse and tunnel.
Additionally, the concession agreement for the 600 MW Khorlochhu project was signed between Bhutan’s Department of Energy and Khorlochhu Hydropower Limited.
An MoU was also signed between Tata Power Trading Company Limited and DGPC for the sale of power from the 32 MW Yungichhu Hydropower Plant.
