Tata Power and Druk Green Power sign MoU to develop 5,000 MW renewable energy in Bhutan

The Memorandum of Understanding (MoU) was signed today at Thimphu in Bhutan between MD – DGPC Dasho Chhewang Rinzin and Tata Power’s CEO & MD Dr Praveer Sinha.

Prime Minister of Bhutan Dasho Tshering Tobgay, Bhutan’s Energy & Natural Resources Minister 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 were also present at the signing event.

Druk Holding and Investments Limited is the sole generation utility of Bhutan.

Bhutan aims to take its overall power generation capacity to 25,000 MW by 2040 for its energy security and regional energy integration 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.

The partnership will help unleash Bhutan’s great potential for hydropower and its important role in ensuring energy security in the region.

Through the collaboration, at least 5,000 MW of renewable energy project, 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% stake for Nu/INR 8.30 billion in the 600 MW Khorlochhu Hydroelectric Project where an investment of over Nu/Rs 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.

Dr. 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 a clean and green portfolio of over 12.9 GW (6.4 GW operational, 6.5 GW under construction) which constitutes 42% of its total capacity, and is well-positioned to expand this to 70% by 2030.

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% 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, peaking during monsoons, aligns with India’s summer demand and supports round-the-clock power alongside India’s expanding renewable energy investments.

Regional energy integration, like Bangladesh importing power from Nepal via India, further boosts prospects for Bhutan’s hydropower investments.