Druk Green Power Corporation (DGPC) and Tata Power have entered into a strategic partnership to construct the 600 MW Khorlochhu (earlier known as Kholongchhu) Hydro Power Limited. DGPC will hold a 60 percent equity stake while Tata Power will invest 40 percent. The estimated project cost, including financing charges, is approximately Nu 70 billion, with a construction timeline of five years.

Tata Power is one of India’s largest integrated power companies. With support from the governments of Bhutan and India, all statutory approvals are in place for construction works to commence immediately.  This collaboration builds on the existing partnership between the DGPC and Tata Power in the 126 MW Dagachhu Hydropower Plant in Bhutan.

The Chief Executive Officer (CEO) and Managing Director of Tata Power, Dr Praveer Sinha, and Managing Director of DGPC, Dasho Chhewang Rinzin, finalised the Definitive Agreement for the project in Mumbai, India on 29 July 2024.

The CEO of Tata Power, Dr Praveer Sinha, said that this is a landmark alliance for Tata Power and DGPC and the development of the Khorlochhu Hydro Power Limited 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,” he said.

The Managing Director of DGPC, Dasho Chhewang Rinzin, said that this strategic partnership with Tata Power to develop the Khorlochhu Hydro Power Limited 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.

The Khorlochhu Hydro Power Limited will enter into long-term Power Purchase Agreements with Tata Power Trading Corporation Limited, a wholly owned subsidiary of Tata Power, for export of summer surplus power to the Indian market and with Bhutan Power Corporation Limited for domestic power sales during the winter.

Tata Power also has a successful Joint Venture with Power Grid Corporation of India Limited for a 1,200 km long transmission line to bring electricity from Bhutan to Delhi. Once operational, the Khorlochhu Hydro Power Limited will meet Bhutan’s growing winter electricity needs and support India’s increasing power demands during the summer.

This strategic partnership is a step towards strengthening the clean energy collaboration between India and Bhutan. This marquee investment underscores Tata Power’s commitment to its sustainable is attainable initiative, striving towards carbon neutrality and providing alternative clean energy to India.

The project aligns with Bhutan’s ambitious goal of achieving 20 GW of hydropower generation capacity by 2040.