Tata Power and Bhutan's Druk Green Power Corporation Limited (DGPC) have expanded their clean energy collaboration through an amendment to their existing Memorandum of Understanding (MoU), adding the 404 MW Nyera Amari I & II Integrated Hydropower Project to their joint development pipeline. The amendment was signed on May 8, 2026, in the presence of Bhutan's Prime Minister Lyonchhen Tshering Tobgay, and was formally executed by Dr. Praveer Sinha, CEO & Managing Director, Tata Power, and Chhewang Rinzin, Managing Director, DGPC.

Expanded Hydropower Portfolio

With the addition of the Nyera Amari I & II project, the total identified hydropower capacity under the Tata Power–DGPC partnership has increased to 5,033 MW from 4,500 MW under the original MoU dated November 19, 2024. The collaboration is now described as the largest partnership between two leading power companies of India and Bhutan in Asia's clean energy sector. The following table outlines the full project portfolio under the partnership:

In addition to hydropower, Tata Power and DGPC also aim to jointly develop 500 MW of solar PV projects in Bhutan.

Project Progress and Strategic Significance

Work has already commenced on the Khorlochhu (600 MW) and Dorjilung (1,125 MW) hydropower projects, together accounting for approximately 35% of the committed portfolio of 5 GW. The projects will be developed with mutually agreed equity participation, and both companies will continue to evaluate and add new hydropower opportunities over time. This expansion is aligned with Bhutan's vision to take its overall generation capacity to 25,000 MW by 2040, supporting the country's energy security and regional energy integration goals.

Leadership Perspectives

Dr. Praveer Sinha, CEO & Managing Director, Tata Power, stated, "This milestone of expanding our joint hydropower portfolio to over 5,000 MW with DGPC marks a significant step in strengthening our clean energy partnership in Bhutan. The addition of the Nyera Amari project reflects the scale, ambition, and long-term commitment of this collaboration. This strategic partnership is not only pivotal for advancing Bhutan's economic growth by unlocking its vast hydropower potential but also plays a critical role in enhancing regional energy security. For India, especially during peak summer months when demand continues to reach record highs, such partnerships ensure access to reliable, clean power."

Dasho Chhewang Rinzin, MD, DGPC, said, "The expansion of our partnership with Tata Power to over 5000 MW hydropower portfolio marks a defining milestone in Bhutan's clean energy journey. The inclusion of the 404 MW Nyera Amari I & II Integrated Hydropower Project, alongside key projects such as Khorlochhu (600 MW), Dorjilung (1,125 MW), Gongri Reservoir with Jeri Pumped Storage (2,540 MW), and Chamkharchhu IV (364 MW), reflects the scale and ambition of this collaboration. This partnership will play a pivotal role in unlocking Bhutan's vast hydropower potential, supporting economic growth, and strengthening regional energy security, while reinforcing Bhutan's position as a leading clean energy nation."

Long-Standing Partnership and Company Profiles

Tata Power's association with DGPC spans over a decade, beginning with the 126 MW Dagachhu Hydropower Project—Bhutan's first public-private hydropower partnership, commissioned in 2008. The original strategic partnership between Tata Power and DGPC was entered on November 19, 2024, with the support of the Royal Government of Bhutan and the Government of India.

Tata Power owns a diversified portfolio of 16.3 GW, spanning renewable and conventional energy generation, transmission, distribution, trading, storage solutions, and solar cell and module manufacturing. The company has 7.5 GW of clean energy generation, constituting 46% of its total capacity, and serves approximately 13 million customers nationwide. DGPC, a subsidiary of Druk Holding and Investments Limited, currently holds a portfolio of 3,473 MW of hydro capacity in Bhutan and is envisioned to achieve 15,000 MW hydro capacity and 5,000 MW solar capacity within the next 10 years.

Tata Power 's joint venture, Dorjilung Hydro Power Limited (DHPL), has secured $515 million in financing agreements with the World Bank for the 1,125 MW Dorjilung Hydroelectric Power Project in Bhutan. The signing ceremony took place in Thimphu on May 5, 2026, marking a significant milestone in the development of one of the region's largest clean energy initiatives. The project is expected to account for approximately one-third of Bhutan's total energy generation, with nearly 80% of its 4,500 GWh annual output to be supplied to India, helping meet rising peak demand particularly during summer months.

Project Overview and Economic Impact

The Dorjilung Hydroelectric Power Project is situated on the Kurichhu River in eastern Bhutan and is designed to generate over 4,500 GWh of clean electricity annually. This output will help close Bhutan's seasonal energy gap during the winter months while providing surplus power for export to India during the summer and rainy seasons. The hydropower plant is projected to increase Bhutan's GDP by 2.4% and create economy-wide benefits, including direct and indirect jobs and entrepreneurial opportunities, while also boosting manufacturing, tourism, and small businesses. Revenues from energy exports will be available for reinvestment in essential services such as health, education, and infrastructure.

Describing the project as a cornerstone of Bhutan's 13th Five-Year Plan, Dasho Tshering Tobgay, Prime Minister of Bhutan, said, "This transformational investment will supply clean energy, spur economic growth, and advance our carbon-negative commitment. This project is a testament to our strong partnership with the World Bank Group and our shared vision for a sustainable and prosperous future for Bhutan's people."

Financial Structure and Stakeholders

The estimated $1.7 billion project is structured as an innovative public-private partnership (PPP) aimed at minimizing sovereign borrowing. The $515 million financing package is expected to catalyze an additional $900 million in private sector financing. The following table summarizes the key funding components:

DHPL is a Special Purpose Vehicle jointly owned by Bhutan's Druk Green Power Corporation (DGPC) (60%) and Tata Power (40%). This unique financing structure enables Bhutan to cover the project cost with only $150 million in direct credit exposure, while cumulatively earning about $4 billion in revenues through taxes, free power, and equity dividends over the 30-year IDA credit period. The $300 million IDA financing and $215 million IBRD financing were signed by Dasho Leki Wangmo, Finance Secretary, Royal Government of Bhutan, and Jean Pesme, World Bank Division Director for Bangladesh and Bhutan, respectively.

H.E. Lyonpo Lekey Dorji, Finance Minister of Bhutan, underscored the project's fiscal prudence: "Its innovative financing structure ensures that this project does not unduly burden public finances, allowing us to continue investing in our people."

Johannes Zutt, World Bank Vice President for the South Asia Region, noted: "The innovative financing model, which brings together public and private capital, sets a new standard for sustainable infrastructure development. Bhutan will be able to reduce costly energy imports and earn revenues from energy exports, while South Asia will reduce carbon emissions and diversify its energy sources."

Xavier Furtado, the World Bank Group's Country Manager for Bhutan, added: "The World Bank Group brought together IDA, IBRD, and IFC to deliver an innovative financing package that enables a project of this scale while protecting Bhutan's debt sustainability."

Regional and Environmental Benefits

The project is viewed as a transformational investment for Bhutan, advancing its carbon-negative commitment by displacing 3.3 million tons of CO2 annually and facilitating clean energy trade. Dasho Chhewang Rinzin, Managing Director of the Druk Green Power Corporation, highlighted the project's strategic value: "It is designed to provide critical grid flexibility, allowing us to manage seasonal shortfalls while maximizing export revenues. We are deeply committed to the project's rigorous environmental standards and maintaining Bhutan's standing as a carbon-negative country."

Dr. Praveer Sinha, CEO & Managing Director of Tata Power, said: "The signing of $515 million in financing agreements marks a momentous milestone for a project that will contribute nearly one-third of Bhutan's electricity generation. This landmark 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, it will help meet rising peak demand especially in summer while enabling Bhutan to expand clean energy exports for shared economic benefit."