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. This hydropower cooperation received impetus in 1974 with the signing of a bilateral agreement for construction of Chukha 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-I HEP, enabling increase in Bhutan’s electricity generation capacity to around 3,490 MW, of which 3,156 MW has been developed under the five India-Bhutan Inter-Governmental projects. These projects were financed through a mix of grant and credit agreed between the Government of India and the Royal Government of Bhutan.

2. At present, the 1200 MW Punatsangchhu-I HEP is being implemented under the Inter-Governmental modality, which includes a grant and credit component. The project is expected to be completed in the coming years.

3. 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). Two such hydropower projects are currently under implementation and some others are under discussion between enterprises on both sides.

4. 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.

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

6. Electricity Trade: Bhutan exports surplus power to India, particularly between May-November every year and during the lean season, it imports its power requirements from India. For the 2025 lean season, India has approved Bhutan’s request for import of 1250 MW of power. 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. During 2025, Bhutan’s total export of electricity was valued at INR/Nu. 24,298 million 2,429.8 crores).

*****

March 2026