The World Bank Group has approved an $815 million financing package for the 1,125 MW Dorjilung Hydroelectric Power Project.
The venture, located on the Kurichhu River, is Bhutan’s largest hydroelectric power project developed under a public-private partnership (PPP). Tata Power holds a 40% stake in the venture, with the remaining 60% owned by Bhutan’s Druk Green Power Corporation (DGPC).
The project is designed to generate over 4,500 GWh of clean electricity annually. Once operational, it will expand Bhutan’s total energy capacity by nearly 40%. Crucially, 80% of the generated power will be exported to India to meet rising renewable demand. Tata Power Trading Company Limited will manage the import and distribution of the electricity within the Indian market.
The funding utilizes a One World Bank approach to minimize sovereign debt while maximizing impact. The package includes $300 million from the International Development Association (IDA), $215 million in enclave loans from the IBRD, and $300 million from the International Finance Corporation (IFC). This structured financing is expected to mobilize an additional $900 million from private investors.
Beyond energy production, the project is a catalyst for regional growth in the Mongar and Lhuentse districts. It will create thousands of jobs during the construction phase and stimulate local entrepreneurship. Infrastructure upgrades, including improved roads and market access, are also core components of the project’s development goals.
“The Dorjilung Hydroelectric Power Project is a national priority and will be transformational for Bhutan—delivering clean electricity, spurring economic growth and advancing our carbon‑negative commitment,” said Lyonpo Lekey Dorji, Finance Minister, Royal Government of Bhutan.
“This approach can serve as a model for future sustainable hydro development in Bhutan and other countries. We’ve worked to put together a package designed to keep sovereign borrowing to a minimum,” said Xavier Furtado, Group Country Manager, World Bank, Bhutan.
