Indian power company Tata Power has partnered with Bhutan’s power generation utility, Druk Green Power (DGPC), to build the 600MW Khorlochhu hydropower project in Bhutan.
In line with this, Tata Power will have a 40% equity investment in the public private partnership company Khorlochhu Hydro Power. The remaining 60% in the Bhutanese hydropower project will be held by DGPC.
Both parties have signed the memorandum of understanding for the project, and the definitive agreement will follow shortly.
To be developed in the Trashiyangtse Dzongkhag district in Eastern Bhutan on the Kholongchhu river, the Khorlochhu hydropower project entails an estimated project cost, including financing charges of about INR69bn ($822m).
The proposed hydropower facility has secured all statutory approvals with support from the governments of India and Bhutan, allowing the construction work to begin immediately.
Construction timeline for the Khorlochhu project is expected to be five years.
The project is in line with Bhutan’s goal of achieving 15GW of hydropower generation capacity by 2040.
DGPC managing director Dasho Chhewang Rinzin said: “This strategic partnership with Tata Power to develop the Khorlochhu hydropower project 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 with Tata Power opens new avenues for sourcing investments to harness Bhutan’s huge hydropower and solar potential. It further ensures access to and complements the evolving Indian energy market for surplus generation in the summer months with opportunities to expand in future to the regional market.”
Upon achieving operations, the Khorlochhu hydropower facility is expected to support Bhutan in addressing its increasing winter electricity requirements.
Besides, it is also expected to export electricity to India to support the increasing power demands of Indian utilities during the summer months.
Khorlochhu Hydro Power will sign long-term power purchase agreements (PPA) with Tata Power’s fully owned subsidiary Tata Power Trading for the export of the summer surplus power to the Indian market.
It will also execute PPAs with Bhutan Power Corporation for the domestic sale of power in the winter months.
Tata Power CEO and managing director Praveer Sinha 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.”
The new collaboration builds on an existing alliance between Tata Power and DGPC for the 126MW Dagachhu hydropower plant in Bhutan.
Tata Power also has a joint venture with Power Grid Corporation of India for a 1,200km long Tala transmission line to bring electricity from Bhutan to Delhi.
