The project will be implemented through a special purpose vehicle (SPV), with DGPC holding 60 per cent equity and Tata Power 40 per cent, which will become an associate company of Tata Power after its proposed commissioning in September 2031.
Tata Power and Bhutan’s Druk Green Power Corp. (DGPC) have signed commercial agreements to jointly develop the 1,125 MW Dorjilung Hydroelectric Power Project, Bhutan’s largest public-private partnership (PPP) hydro venture to date.
At an estimated project cost of ₹1.31 trillion (₹1.31 trillion), Dorjilung will be Bhutan’s second-largest hydroelectric installation and a strategic anchor in the Indo-Bhutan renewable energy corridor. The project will be implemented through a special purpose vehicle (SPV), with DGPC holding 60 per cent equity and Tata Power 40 per cent. Once commissioned, the SPV will become an associate company of Tata Power.
The concession agreement was signed in Thimphu in the presence of Bhutan’s Prime Minister Lyonchhen Tshering Tobgay, senior officials from the Ministry of Energy and Natural Resources (MoENR), Druk Holding Investments, Tata Power, the Indian Embassy in Bhutan, and the World Bank.
Regional Impact
India’s largest integrated power company said on Friday it will channel its ₹15.72 billion equity investment through structured tranches comprising equity shares and optionally convertible redeemable preference shares (OCRPS) carrying a nominal 0.01 per cent non-cumulative dividend.
“The Dorjilung project reinforces our commitment to accelerating clean energy development in the region,” said Praveer Sinha, CEO & MD, Tata Power. “It is designed to fully support Bhutan’s domestic energy aspirations while enabling the export of surplus clean power to India, strengthening regional energy security. This partnership further strengthens our hydropower portfolio and positions the Indo-Bhutan energy corridor as a leading model for mutually beneficial, cross-border green energy cooperation.”
The run-of-the-river Dorjilung project will be developed on the River Kurichhu in Mongar, Bhutan, with six units of 187.5 MW each and six-hour pondage for peaking. Scheduled for commissioning in September 2031, the project will supply 80 per cent of its generation to India.
Bilateral Clean Energy Goals
The Dorjilung agreement follows the recent commissioning of the 1,020 MW Punatsangchhu II project and the expected completion of the 1,200 MW Punatsangchhu I project within four years. India’s concessional line of credit worth ₹40 billion for Bhutan’s energy infrastructure further signals strong bilateral support for sustainable growth.
“We are extremely happy to be moving ahead with Dorjilung so soon after the Khorlochhu project,” said Dasho Chhewang Rinzin, Managing Director, DGPC. “Bhutan’s hydropower potential positions it at the heart of South Asia’s clean energy future. Our strategic partnership with Tata Power reflects Bhutan’s commitment to collaborative regional progress. By combining Bhutan’s hydropower capabilities with India’s technical expertise, we are creating a future of reliable, clean energy that benefits both nations and sets a global benchmark in green cooperation.”
Dorjilung builds on Tata Power’s earlier investments in Bhutan, including a 26 per cent stake in the Dagachhu Hydro Power Project and a 40 per cent stake in the under-implementation 600 MW Khorlochhu Hydropower Project. Together, these projects advance the joint commitment to develop 5,000 MW of clean energy capacity in Bhutan, aligned with Bhutan’s national priorities and India’s net-zero ambitions.
Supported by the World Bank, Dorjilung marks a milestone in cross-border clean-energy financing and regional energy diplomacy.