Why in news?
Bhutan signed a financing package worth $515 million with the World Bank to build the 1,125 megawatt Dorjilung Hydroelectric Power Project on the Kurichhu River. Scheduled to be the country’s largest hydropower plant, the project will export most of its electricity to India and significantly expand Bhutan’s energy capacity.
Background
Bhutan relies on hydropower for a major share of its revenue and electricity supply. Existing projects such as Tala, Chukha and Mangdechhu were built with Indian assistance and export power to India. The Dorjilung project, to be developed under a public–private partnership between Bhutan’s state utility, Druk Green Power Corporation (DGPC), and Tata Power of India, will be a run‑of‑river scheme producing more than 4,500 gigawatt hours of clean electricity each year.
Key details
- Capacity and impact: At 1,125 MW, Dorjilung will increase Bhutan’s installed hydropower capacity by about 40 % and is expected to boost the nation’s gross domestic product by 2.4 % once operational.
- Power sharing: Approximately 80 % of the output will be supplied to India, helping to meet peak demand during dry seasons and strengthening cross‑border energy cooperation.
- Financing: The World Bank’s International Development Association (IDA), International Bank for Reconstruction and Development (IBRD) and International Finance Corporation (IFC) will provide concessional loans and partial risk guarantees. Private equity from Tata Power and other investors will cover the balance.
- Environmental and social safeguards: As a run‑of‑river project, Dorjilung will not create a large reservoir. Nonetheless, detailed environmental management plans and livelihood restoration programmes have been promised to address downstream impacts.
Significance
The project is part of Bhutan’s strategy to harness its fast‑flowing rivers for economic growth while maintaining low carbon emissions. For India, importing clean hydropower from Bhutan supports renewable energy targets and diversifies energy sources. The partnership also demonstrates confidence in cross‑border infrastructure investments.