Tata Power and Druk Green of Bhutan partners for 5,000 MW clean energy projects

This is in keeping with Bhutan’s vision for its energy sector which is to take its overall generation capacity to 25,000 MW by 2040 for its energy security and regional energy integration.

In a landmark move to strengthen Regional energy security and support the clean energy transition, Tata Power Company Ltd (Tata Power),  has entered into a strategic partnership with Druk Green Power Corporation Ltd (DGPC), a subsidiary of Druk Holding and Investments Limited, sole generation utility of Bhutan, to collaborate and develop at least 5,000 MW of clean energy generation capacity in Bhutan.

This is in keeping with Bhutan’s vision for its energy sector which is to take its overall generation capacity to 25,000 MW by 2040 for its energy security and regional energy integration. Bhutan plans to achieve this target through diversification in its energy portfolio beyond traditional hydropower, which would include solar and geothermal energy.  This will extend to diversifying project structuring and financing through such strategic partnerships.

With the support of the Royal Government of Bhutan and the Government of India, this marks the largest partnership between two of the leading power companies of the two nations in Asia’s clean energy sector. Both companies have a stellar track record in the energy sector and a long-standing relationship having worked together for over 15 years.

This strategic partnership signifies Tata Power’s pre-eminence as the most preferred clean energy partner not only in India but also as a regional leader. This partnership will help unleash Bhutan’s great potential for hydropower and its important role in ensuring energy security in the region.

The Memorandum of Understanding (MoU) was signed at Thimphu in Bhutan between Dasho Chhewang Rinzin, MD – DGPC and Praveer Sinha, CEO & MD – Tata Power, in the esteemed presence of the Prime Minister of Bhutan, Dasho Tshering Tobgay; Minister for Energy & Natural Resources, Lyonpo Gem Tshering; Chairman – Tata Sons, N. Chandrasekaran; Ambassador of India to Bhutan, Sudhakar Dalela; and other senior officials from the Royal Government of Bhutan, Embassy of India, DGPC and Tata Power.

Through the collaboration, at least 5,000 MW of renewable energy projects; including 4,500 MW of hydropower comprising the 1,125 MW Dorjilung HEP; 740 MW Gongri Reservoir; 1,800 MW Jeri Pumped Storage; and 364 MW Chamkharchhu IV will be developed in phases together. Another 500 MW of Solar projects will be developed by Tata Power Renewable Energy Limited (TPREL), a subsidiary of Tata Power.

As a precursor to this collaboration, Tata Power recently acquired a 40 percent stake for Nu/INR 8.30 billion in the 600 MW Khorlochhu Hydroelectric Project where an investment of over Nu/INR 69 billion will be made to develop the project. Tata Power has had a long-standing relationship with DGPC since 2008 when the two companies joined forces to successfully develop the 126 MW Dagachhu Hydropower Plant as the first Public Private Partnership in Bhutan’s hydropower sector. Tata Power also has a transmission project of a 1,200 km long Tala transmission line that evacuates clean power from Bhutan to India.

Praveer Sinha, CEO & MD, Tata Power, said, “Tata Power’s partnership with Druk Green Power Corporation reinforces our credentials as the most preferred clean energy partner in the region. Together, we are building 5000 MW of clean energy capacity that will help harness Bhutan’s hydropower potential and support both countries’ growing energy demands with reliable and round-the-clock clean energy supply. Together we are shaping a new energy era.”

Tata Power has emerged as a leader in the renewable energy space, with a robust clean and green portfolio crossing 12.9 GW (6.4 GW operational, 6.5 GW under construction) which constitutes 42 percent of its total capacity, and is well-positioned to expand this to 70 percent by 2030. Tata Power has over 100 years of experience in hydropower generation and is emerging as a key player in pumped hydro storage projects. The Company is committed to supporting India’s successful energy transition.

Dasho Chhewang Rinzin, MD, DGPC said, “This strategic partnership with Tata Power is in keeping with Bhutan’s aspirations to maximize benefits to the people of Bhutan through fast-tracking the harnessing of its huge renewable energy resources for its economic development and long-term energy security. Bhutan places a lot of confidence in Tata Power and the partnership to deliver on these expectations.”

With Bhutan’s economy projected to grow by 7.2 percent in FY25, the country’s energy requirements are bound to increase. Largely driven by hydropower—a vital part of Bhutan’s economy, capitalizing on this national asset will ensure that its growing power demands are met while also ensuring economic benefits including green job creation and infrastructure development.

Bhutan’s hydropower generation which peaks during the monsoon months complements India’s demand patterns that also peak in the summer months. More importantly, Bhutan sees its hydropower as critical in ensuring round-the-clock availability of power with India’s huge investments in renewables such as solar and wind and the plans to further accelerate investments in these renewables over the next two decades. With the recent agreement reached for Bangladesh to import power from Nepal through India, there are also growing opportunities for regional energy integration that would boost investments in Bhutan’s hydropower.