A strategic joint venture between Tata Power (40%) and Bhutan’s Druk Green Power Corporation (60%) has signed a ₹4,829 crore loan agreement with India’s Power Finance Corporation (PFC) for the 600 MW Khorlochhu Hydropower Project in Bhutan.
The deal, which includes a ₹950 crore standby facility, marks PFC’s first cross-border financing in Bhutan and will strengthen clean energy cooperation between the two nations, with commissioning expected by 2029-2030.
Highlights:
Total Debt: ₹4,829 crore (Primary Loan)
Standby Facility: ₹950 crore (Additional Credit)
Total Estimated Project Cost: Approximately ₹6,900 crore
Sole Lender: PFC will be the sole lender for the project.
Timeline: Expected to be commissioned between 2029 and 2030, with construction underway since January 1, 2025.
Energy Output: Expected to generate 2,524 million units of electricity annually.
The project is structured to benefit both nations, with the generated power expected to meet Bhutan’s winter demand and enable the export of surplus electricity to India during the summer months.
Thought leadership:
The transaction has been hailed by all parties as a major step in regional clean energy cooperation.
Dr. Praveer Sinha, CEO & MD, Tata Power, said, “This is a landmark alliance for Tata Power and Druk Green Power Corporation. The development of the 600 MW Khorlochhu Hydropower Project in Bhutan will provide energy security to the region. This project marks a significant step towards building a sustainable energy landscape, underscoring Tata Power’s commitment to a greener future.”
Dasho Chhewang Rinzin, MD, DGPC, said, “This strategic partnership with Tata Power… is a significant step towards Bhutan’s energy security and economic development as the country seeks to become a high-income GNH economy by 2034. This partnership… opens new avenues for sourcing investments to harness Bhutan’s huge hydropower and solar potential.”
It must be noted that the transaction marks PFC’s first cross-border financing in Bhutan and highlights the growing clean energy cooperation between the two countries.
