Tata Power’s Bhutan hydro project gets $515 mn World Bank nod
On Tuesday, the Bhutanese government and the World Bank signed a contract with Tata Power Co., India’s largest private sector energy company. Ltd and Bhutan’s state-run Druk Green Power Corp. Ltd. signed financing agreements worth $515 million for the 1,125 megawatt Dorjilung Hydroelectric Power Project developed by the joint venture between
The project in eastern Bhutan, once completed, will generate 4,500 gigawatt-hours (GWh) of clean electricity each year, 80% of which will be exported to India during the peak summer season, the World Bank said in a statement.
Bhutanese Prime Minister Dasho Tshering Tobgay said the project, which is a key part of Bhutan’s 13th five-year plan, will be the country’s largest hydropower project developed under a public-private partnership and that the investment will provide clean energy, stimulate economic growth and advance the country’s commitment to carbon neutrality.
According to the statement, the project, which is expected to cost $1.7 billion, will strengthen clean energy cooperation between India and Bhutan and strengthen regional energy security.
Earlier this year, the World Bank received a request from the International Development Association (IDA), Tata Power and Druk Green Power Corp. Approved a $300 million concession package that includes a $150 million grant for Dorjilung Hydro Power Ltd (DHPL), a special-purpose joint venture vehicle between the International Bank for Reconstruction and Development (IBRD), as well as $215 million from the International Bank for Reconstruction and Development (IBRD) and up to $300 million from the International Finance Corporation (IFC).
Financing agreements between the Bhutanese government and IDA and IBRD were signed on Tuesday.
Druk has a 60% stake in the joint venture and Tata Power has a 40% stake.
Peak power demand
This development comes just days after India’s peak energy demand hit a record high of 256 GW on April 25, as intense heatwaves in the northwest and central regions increased the use of cooling devices and electricity consumption.
The peak energy demand season in India generally runs from May to June, but power demand figures reaching record levels in April 2026 have surpassed estimates from Grid India, which predicted peak power demand for the week of April 20-26 to be 239.5 GW.
According to the Central Electricity Authority, India’s power sector planning body, peak demand in 2026-27 could reach a record high of 271 GW.
Managing Director Praveer Sinha said, “Today’s signing of the $515 million financing agreements marks a pivotal milestone for a project that will contribute to nearly one-third of Bhutan’s production. This landmark project will strengthen regional energy security and deepen India-Bhutan clean energy cooperation. With nearly 80% of the annual production of 4,500 GWh being provided to India, it will help meet rising peak demand, especially during the summer months, while Bhutan’s clean energy for shared economic benefit.” “It will allow it to expand its exports,” he said. CEO of Tata Power.
Xavier Furtado, World Bank group Bhutan country manager, said the Dorjilung Hydroelectric Power Project represents “a model for building clean, sustainable and resilient energy security” amid the global fuel supply disruption caused by the West Asian war. In the World Bank statement, it was stated that the power plant is expected to increase Bhutan’s gross domestic product by 2.4%.
Dasho Chhewang Rinzin, managing director of Druk Green Power Corp., said the project will allow Bhutan to provide grid flexibility to manage energy deficits and maximize export revenues. “This project marks a transformative change in Bhutan’s energy sector and opens the door to scaling this financing model across the hydropower sector,” he added.
