Royal Government of Bhutan and World Bank Ink $515 Million Deal for Dorjilung Hydroelectric Project

Royal Government of Bhutan and World Bank Ink $515 Million Deal for Dorjilung Hydroelectric Project​

THIMPHU, May 5, 2026 - The Royal Government of Bhutan and The World Bank announced the signing of financing agreements totaling $515 million for the 1,125 MW Dorjilung Hydroelectric Power Project. The agreement is set to significantly boost Bhutan's energy sector, providing clean electricity, driving economic growth, and enabling clean energy exports.

The Dorjilung Hydroelectric Power Project, located on the Kurichhu River in eastern Bhutan, is described as a cornerstone of Bhutan's 13th Five-Year Plan and the Kingdom's largest hydropower project developed under a public-private partnership model.

According to officials, the facility is expected to generate over 4,500 GWh of clean electricity annually. This substantial power supply will help close Bhutan's seasonal energy gap during winter months and provide surplus power for export to India during the summer and rainy seasons.

The economic impact of the project is projected to increase Bhutan's Gross Domestic Product (GDP) by 2.4%. Furthermore, it is anticipated to create direct and indirect jobs, boost manufacturing and tourism, and supply reliable, affordable electricity, with energy export revenues available for reinvestment in vital sectors such as health, education, and infrastructure. The project is also expected to have a significant regional environmental impact by displacing 3.3 million tons of CO2 annually.

Project Financing and Structure​

The financing model is noted for its innovative structure, combining public and private capital to minimize sovereign borrowing. The total estimated project cost is $1.7 billion.

The World Bank Group's Board of Executive Directors previously approved the concessional financing required for the project. The financing was delivered through several arms of the World Bank Group and private sector participation:


This financing is structured through Dorjilung Hydro Power Limited (DHPL), a Special Purpose Vehicle entity jointly owned by Bhutan's Druk Green Power Corporation (60 percent) and Tata Power (40 percent).

The project is set to catalyze an additional $900 million in private sector financing. This unique structure enables Bhutan, with a direct credit exposure of only $150 million, to cover the $1.7 billion project cost and cumulatively earn an estimated $4 billion in revenues through taxes, free power, and equity dividends over the 30-year IDA credit period.

Leadership Statements​

Dasho Tshering Tobgay, Prime Minister of Bhutan, stated that the project is a testament to Bhutan's strong partnership with the World Bank Group and their shared vision for a sustainable and prosperous future.

Johannes Zutt, World Bank Vice President for the South Asia Region, highlighted that the innovative financing model sets a new standard for sustainable infrastructure development. He noted that Bhutan will be able to reduce costly energy imports and earn revenue from energy exports, while South Asia will benefit from reduced carbon emissions and diversified energy sources.

Dr Praveer Sinha, CEO & Managing Director of Tata Power, noted that the signing of the $515 million in financing agreements is a momentous milestone. He emphasized that the project will strengthen regional energy security and deepen India-Bhutan clean energy cooperation, with nearly 80% of its 4,500 GWh annual generation supplied to India, helping meet peak demand while enabling clean energy exports.

TATAPOWER Stock Price Movement​

Today, Tata Power Company Limited shares edged higher to close at ₹442.65, marking a gain of 0.16% for the session. The stock experienced considerable trading interest, with investors moving 6.79 million shares throughout the day.