Indian government to fund 10 hydropower projects in Bhutan

The Indian Ministry of External Affairs (MEA) is set to partly finance the development of 10 hydropower projects in Bhutan.

The 10,000MW projects will be built by Indian state-owned firms including NHPC, Tehri Hydro Development (THDC) and SJVN through joint ventures.

The overall investment for the projects is estimated to $10bn. Also, the company executives and government officials stated that the projects will be jointly funded by governments of Indian and Bhutan, reported

An Indian power ministry official was quoted by as saying that the projects are blocked by financial constraints, and the developers are outlining a funding mechanism for it.

Another source stated: “These projects will be built with debt-to-equity ratio of 30-70%. “For the individual projects to proceed and JV agreements to be inked, an umbrella agreement will be signed between the governments of the two countries,” added the source.

A THDC executive, however, has stated that the funds granted by MEA would be a gift to the Bhutan government.

The executive also added that both the countries would sign a board framework agreement. Meanwhile, 90% of the power generated through these projects will be procured by India to meet its peak energy shortage of 9%.