The Dorjilung Hydroelectric Project is a planned 1,125 MW mega-hydropower project on the Kuri Chhu River in eastern Bhutan. Part of the Indo-Bhutanese intergovernmental hydropower cooperation framework, the project would be among the largest in Bhutan and is intended to significantly expand the country's power generation capacity and export revenue.
The Dorjilung Hydroelectric Project is a planned 1,125-megawatt (MW) hydroelectric power project proposed for construction on the Kuri Chhu (Kuri River) in eastern Bhutan. If built as designed, it would rank among the largest hydropower installations in the country, comparable in scale to the Punatsangchhu-I (1,200 MW) and Punatsangchhu-II (1,020 MW) projects. The Dorjilung project falls under the broader framework of Indo-Bhutanese hydropower cooperation, through which India finances the construction of hydroelectric plants in Bhutan in exchange for the purchase of surplus electricity, an arrangement that has been the cornerstone of Bhutan's economic development strategy since the commissioning of the Chhukha Hydroelectric Plant in 1988.[1]
As of the mid-2020s, the Dorjilung project remains in the planning and pre-construction phase. While it has been included in successive bilateral agreements between the governments of Bhutan and India as one of the priority projects for development, the timeline for construction has been subject to delays due to a combination of technical, financial, environmental, and geopolitical considerations. The project exemplifies both the transformative potential and the complex challenges inherent in developing mega-hydropower in the Himalayan region.[1]
Background and Planning
Bhutan's hydropower potential is estimated at approximately 30,000 MW, of which roughly 24,000 MW is considered technically feasible for development. As of the 2020s, installed capacity stands at approximately 2,300 MW, meaning the vast majority of the country's hydroelectric resources remain untapped. Recognising this potential, the governments of Bhutan and India have identified a series of projects for joint development under intergovernmental agreements signed in 2006, 2008, and subsequent years. The Dorjilung project was included in these agreements as one of ten planned hydropower projects intended to raise Bhutan's installed capacity to 10,000 MW.[2]
The project site is located on the Kuri Chhu, one of Bhutan's major north-south flowing rivers. The Kuri Chhu originates in the glaciated highlands of northern Bhutan and flows southward through a deep valley in the eastern districts before crossing into the Indian state of Assam, where it is known as the Kurichu or Manas tributary system. The Dorjilung project is designed as a storage-type scheme, meaning it would include a major dam to impound water and regulate flows, enabling the plant to generate power on demand rather than being entirely dependent on natural river discharge as in run-of-river schemes.[1]
Technical Design
The planned installed capacity of 1,125 MW would be achieved through multiple generating units housed in a powerhouse downstream of a concrete gravity or arch dam. The dam would create a storage reservoir capable of regulating seasonal flow variations, storing monsoon runoff for generation during the dry winter months when demand is high but natural river flow declines significantly. This storage capability distinguishes the Dorjilung project from Bhutan's existing run-of-river plants, which experience substantial seasonal output variation and are unable to provide firm peaking power during winter.[1]
The design head — the vertical distance between the reservoir surface and the turbines — and the type of turbines (likely Francis turbines given the anticipated head and flow parameters) have been specified in preliminary engineering studies, though final design parameters remain subject to the detailed project report (DPR) process. Annual energy generation is projected at approximately 4,000 to 4,500 GWh, which would represent a substantial addition to Bhutan's total generation capacity. The estimated project cost has been reported in various sources at approximately US$2 billion to US$2.5 billion, though this figure is subject to revision as detailed engineering progresses and construction cost indices change.[1]
Financing Model
Under the standard Indo-Bhutanese hydropower cooperation model, India finances the construction of hydroelectric plants in Bhutan through a combination of grants and concessional loans — typically a 40:60 ratio of grant to loan, or in some cases 30:70. Upon commissioning, Bhutan sells surplus electricity to India at negotiated tariff rates, using the revenue to service the loan component and fund domestic development. The power tariff is a critical variable, as it determines the project's financial return to Bhutan and the cost of electricity to Indian off-takers.[2]
The Dorjilung project is expected to follow this established financing framework, with the Government of India providing the bulk of the construction capital. However, negotiations over tariff rates, the grant-to-loan ratio, and the terms of the power purchase agreement have been protracted. Bhutan has sought more favourable financial terms — including a higher grant component and improved tariff rates — informed by the experience of earlier projects where tariff revisions lagged behind cost escalations, reducing the anticipated financial return to Bhutan.[3]
Challenges and Delays
The Dorjilung project has experienced significant delays relative to original timelines. Several factors have contributed to this. The Punatsangchhu-I and Punatsangchhu-II projects, which are already under construction, have encountered major geological difficulties — including landslides and unstable rock formations at dam sites — that substantially increased costs and extended construction schedules. These difficulties have made both governments more cautious about committing to additional mega-projects without thorough geological investigation.[4]
Environmental and social concerns also factor into the project's timeline. A storage dam on the Kuri Chhu would inundate a reservoir area in one of Bhutan's less densely populated but ecologically sensitive eastern valleys, potentially affecting forests, agricultural land, and small settlements. Bhutan's constitutional commitment to maintaining 60 percent forest cover and the government's environmental review processes require comprehensive impact assessments and mitigation planning before construction can commence. Additionally, downstream impacts on sediment transport, fisheries, and water availability in India's Assam state require bilateral environmental coordination.[1]
Geopolitical considerations also influence project development. India's interest in Bhutanese hydropower is partly strategic — it provides India with clean energy while strengthening economic ties with a Himalayan buffer state that also borders China. However, Bhutan's efforts to diversify its economic partnerships, including exploratory discussions with other potential development partners, have introduced complexity into the bilateral relationship. The pace of the Dorjilung project is thus influenced by broader diplomatic dynamics between Bhutan, India, and regional actors.[3]
Strategic Importance
Despite the delays, the Dorjilung project remains strategically important for Bhutan's long-term economic planning. Hydropower revenue constitutes the single largest source of government income and foreign exchange earnings, and additional large-scale projects are essential to sustaining economic growth, funding social services, and achieving the government's development goals. The storage component of the Dorjilung project is particularly valuable because it would enable Bhutan to supply firm peaking power — electricity available on demand during peak consumption hours — which commands significantly higher tariffs in the Indian power market than the variable run-of-river output that constitutes most of Bhutan's current exports.[2]
The project also has implications for regional energy security and climate change mitigation. South Asia faces a growing electricity deficit and remains heavily dependent on coal-fired generation, which is a major source of greenhouse gas emissions. Large-scale Himalayan hydropower from projects like Dorjilung could displace significant quantities of coal-fired generation in the Indian grid, contributing to regional decarbonisation objectives. However, realising this potential requires navigating the complex technical, financial, environmental, and political challenges that have characterised Himalayan hydropower development throughout the region.[1]
References
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