The development is in line with Bhutan’s vision for its energy sector, which is to raise its overall power generation capacity to 25,000 MW by 2040, from 2,300 MW currently, for its energy security and regional energy integration.
Tata Power Company Ltd has entered into a strategic partnership with Druk Green Power Corporation Ltd (DGPC) to develop at least 5,000 MW of clean energy generation capacity in Bhutan.DGPC is a subsidiary of Druk Holding and Investments Ltd, Bhutan's government-owned holding company with investments across sectors such as manufacturing, energy, natural resources, financial services, and communication.
“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 5,000 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," Praveer Sinha, chief executive and managing director, Tata Power.
The development is in line with Bhutan’s vision for its energy sector, which is to raise its overall power generation capacity to 25,000 MW by 2040, from 2,300 MW currently, for its energy security and regional energy integration, Tata Power said. The landlocked country 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," Tata Power said, adding that the partnership will help unleash Bhutan’s great potential for hydropower and its important role in ensuring energy security in the region.
The projects to be developed through the partnership would include 4,500 MW of hydropower comprising the 1,125 MW Dorjilung hydroelectric project; 740 MW Gongri Reservoir; 1,800 MW Jeri pumped storage project and the 364 MW Chamkharchhu IV. Another 500 MW of solar projects will be developed by Tata Power Renewable Energy Ltd (TPREL), a subsidiary of Tata Power.
Tata Power recently acquired a 40% stake for ₹8.30 billion in the 600 MW Khorlochhu Hydroelectric Project where an investment of over ₹69 billion will be made to develop the project.
The memorandum of understanding (MoU) was signed on Tuesday at Thimphu between Dasho Chhewang Rinzin, MD, DGPC, and Praveer Sinha in the presence of Bhutanese prime minister Dasho Tshering Tobgay and Tata Sons chairman N. Chandrasekaran.
Tata Power has had a long-standing relationship with DGPC going back to 2008 when the two companies joined hands 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 1,200-km Tala transmission line that evacuates clean power from Bhutan to India.
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."
Bhutan’s hydropower generation, which peaks during the monsoon months, complements India’s demand patterns that also peak in the summer months. 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 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.