Embassy of India

India-Bhutan Hydropower Cooperation

Cooperation in the field of energy, particularly hydropower is an important area of partnership between India and Bhutan. Hydropower cooperation received impetus in 1974 with the signing of a bilateral agreement for the construction of Chhukha Hydroelectric Project (HEP). Since then, both governments have successfully constructed and commissioned five major hydropower projects- 336 MW Chukha HEP, 60 MW Kurichhu HEP, 1020 MW Tala HEP, 720 MW Mangdechhu HEP and 1020 MW Punatsangchhu-II HEP, enabling increase in Bhutan’s electricity generation capacity to around 3,600 MW, of which 3,156 MW has been developed under the five India-Bhutan Inter-Governmental projects. These projects had been financed through a mix of grant and credit agreed between the Government of India and the Royal Government of Bhutan.

2. At present, one more 1200 MW Punatsangchhu-I HEP is being implemented under the Inter-Governmental modality using grant and credit component. Shri Manohar Lal, Minister of Power and Housing & Urban Affairs visited Bhutan from 9-12 April 2026. During the visit, dam concreting works of Punatsangchhu-I HEP was re-commenced and Tariff Protocol of Punatsangchhu-II HEP for export of power to India was signed.

3. In March 2024, during Prime Minister Shri Narendra Modi’s state visit to Bhutan, both sides released a Joint Vision Statement on India-Bhutan Energy Partnership. It agreed on opportunities to further strengthening mutually beneficial bilateral clean energy partnership, including through development of new energy projects and trade in electricity; and to engage in the development of new energy projects in the fields of solar and green hydrogen, including through the participation of Indian entities as strategic partners.

4. Shri Pankaj Agarwal, Secretary (Power) visited Bhutan from 4-8 June 2026. During the visit, he co-chaired the inaugural Joint Steering Committee (JSC) meeting on power sector cooperation and also held a discussion with the Bhutanese side on Sankosh hydropower project after it was subsumed under Gelephu Mindfulness City.

5. As part of Bhutan’s plan to develop further hydropower and solar power generation, Indian private sector companies are collaborating with Bhutanese entities such as Druk Green Power Corporation (DGPC) and Druk Holdings and Investments (DHI). Three joint venture hydropower projects with participation from India are under construction viz. 600 MW Khorlochhu, 1125 MW Dorjilung and 570 MW Wangchhu hydropower projects. Some other hydropower projects are also under discussion. The 500 kW Lunana hydropower project funded by Indian grant is also under construction.

6. India and Bhutan have developed a power transmission network for trade in electricity between the two countries. A Joint Transmission Planning Team (JTPT) between the two countries serves as a platform for planning further development of power transmission facilities to cater to evolving needs in the times ahead.

7. Bhutan exports surplus power to India, particularly during peak season from May-October every year and during lean season, it imports its power requirements from India. A new modality for export of electricity to India through Indian Power Exchanges was initiated in September 2023 through Day Ahead Market and Real Time Market. In 2025, Bhutan’s total export of electricity to India was valued at INR/Nu. 24,298 million (2,429.8 crores).

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October 2026