World Bank Group Approves $815 Million Financing for Tata Power's 1,125 MW Bhutan Hydropower Project

2 min read | Published on 23 Jan 2026, 03:31 PM |Updated on 23 Jan 2026, 03:31 PM

Reviewed by

Riya DScanX News Team

Key Highlights

World Bank Group approves $815 million financing package for 1,125 MW Dorjilung Hydropower Project in Bhutan, jointly owned by Tata Power (40%) and DGPC (60%). The project will generate over 4,500 GWh annually with 80% supplied to India, representing Bhutan's largest PPP hydropower initiative and expanding the country's installed capacity by nearly 40%.

*this image is generated using AI for illustrative purposes only.

The World Bank Group has sanctioned comprehensive long-term financing for the 1,125 MW Dorjilung Hydropower Project in Bhutan, marking a significant milestone in regional clean energy cooperation. The project represents a joint venture between Bhutan's Druk Green Power Corporation (60%) and Tata Power (40%), India's largest private integrated power company, operating through a Special Purpose Vehicle called Dorjilung Hydro Power Limited.

Project Scale and Impact

The Dorjilung project stands as Bhutan's largest hydropower initiative developed under a public-private partnership model. Key project specifications include:

Parameter:	Details
Capacity:	1,125 MW
Annual Generation:	Over 4,500 GWh
Supply to India:	Approximately 80%
Capacity Expansion:	Nearly 40% increase in Bhutan's installed energy capacity
Project Locations:	Mongar and Lhuentse districts, Bhutan

The project will significantly expand Bhutan's installed energy capacity and strengthen the country's position as a reliable clean energy exporter to India. Tata Power Trading Company Limited, a wholly owned subsidiary of Tata Power, will handle power importation into India and manage onward distribution.

Comprehensive Financing Structure

The World Bank Group has structured a multi-institutional financing package totaling $815 million across various instruments:

Financing Source:	Amount	Recipient
IDA Grant:	$150 million	DGPC (Government of Bhutan)
IDA Credit:	$150 million	DGPC (Government of Bhutan)
IBRD Enclave Loan (DGPC):	$15 million	DGPC (Government of Bhutan)
IBRD Enclave Loan (DHPL):	$200 million	Dorjilung Hydro Power Limited
IFC Loan:	$300 million	Dorjilung Hydro Power Limited
Total World Bank Financing:	$815 million	Combined

The remaining funding requirements for the project will be arranged from various market participants, with the World Bank's approval providing long-term visibility and strengthening both partners' ability to advance the project systematically.

Regional Cooperation and Strategic Benefits

The Dorjilung project reinforces the enduring energy cooperation between Bhutan and India, demonstrating how regional partnerships can deliver shared economic and environmental benefits. The initiative advances South Asia's clean energy landscape while showcasing effective collaboration between governments, multilateral institutions, and private sector entities.

The project is expected to generate substantial employment opportunities during both construction and operational phases, stimulate local entrepreneurship, and support livelihoods in the Mongar and Lhuentse districts of Bhutan. This comprehensive approach ensures that the project delivers sustainable value for all stakeholders while contributing to regional energy security.

Company Portfolio Context

Tata Power maintains a diversified portfolio of 15.9 GW spanning the entire power value chain, including renewable and conventional energy generation, transmission, distribution, trading, storage solutions, and solar manufacturing. The company operates 7.0 GW of clean energy generation, representing 44% of its total capacity, while serving approximately 13 million customers nationwide. The company has committed to achieving Net Zero emissions by 2045, positioning the Dorjilung project as a strategic component of its clean energy transition strategy.

Historical Stock Returns for Tata Power