Sunkosh Hydropower Project

The Sunkosh Hydropower Project is a proposed mega reservoir-based hydroelectric scheme on the Sunkosh River (also known as the Punatsangchhu in its upper reaches) in Dagana District, Bhutan. With a projected installed capacity of 4,060 megawatts (MW) and an estimated cost exceeding Nu 323 billion (approximately USD 3.8 billion), it would be by far the largest hydropower project ever undertaken in Bhutan and one of the largest in South Asia. The project is being developed as a bilateral initiative between Bhutan and India, and is positioned as a cornerstone of Bhutan's Renewable Energy Development Roadmap 2040, which targets an additional 20,000 MW of renewable energy generation.^[1]

The Sunkosh project has had a protracted and uncertain history. First conceptualised in the 1990s, it was included in the ambitious India–Bhutan agreement of 2008 to develop 10,000 MW of hydropower capacity by 2020. The project has since undergone multiple capacity revisions, a formal halt by the Bhutanese government in 2022, and a subsequent revival with a comprehensive reassessment currently underway. Its scale, complexity, and the environmental and social implications of constructing a major reservoir in the Himalayan foothills have made it one of the most debated infrastructure proposals in Bhutanese history.^[2]

Project History

The original Detailed Project Report (DPR) for the Sunkosh project was prepared by India's Central Water Commission (CWC) in 1995, establishing the initial technical parameters for a large reservoir scheme on the Sunkosh River. The DPR was subsequently updated in 2012 by THDC India Limited, a joint venture of the Indian central government and the Uttar Pradesh state government that specialises in hydropower development. The 2012 update envisaged a capacity of 4,060 MW.^[3]

The project was part of the bilateral framework established during Indian Prime Minister Manmohan Singh's visit to Bhutan in 2008, when the two countries agreed to develop 10,000 MW of hydropower capacity in Bhutan for export to India. This agreement positioned hydropower as the centrepiece of the India–Bhutan economic relationship. However, the ambitious timeline proved unrealistic: the Punatsangchhu-I and Punatsangchhu-II projects experienced massive cost overruns and construction delays, casting a shadow over the feasibility of launching additional mega-projects simultaneously.^[4]

Capacity Revisions and 2022 Halt

Over the course of its planning history, the Sunkosh project's proposed capacity was revised downward from 4,060 MW to 2,560 MW, reflecting concerns about project scale, cost, and environmental impact. Despite this reduction, the project remained stalled. In August 2022, the Bhutanese government formally announced that it would not pursue the 2,560 MW Sunkosh project, with officials stating that the priority was to complete the troubled Punatsangchhu-I and II projects before committing to new large-scale ventures. Starting many large projects simultaneously, officials explained, would lead to further cost escalations and strain the country's administrative and financial capacity.^[5]

A significant development in the project's governance structure came with an in-principle commitment by the Indian government in 2017, reiterated in 2018, to implement the Sunkosh project under the intergovernmental model. Under this arrangement, Bhutan would retain full ownership of the project, with India providing financing and technical support — a model that gives Bhutan greater control over the asset compared to the joint venture arrangements used for earlier hydropower projects.^[6]

Revival and Current Status

After years of uncertainty, the Sunkosh project has been revived with its capacity restored to the original 4,060 MW. A comprehensive reassessment is underway, including updated hydrological studies, revised cost estimates, and socio-environmental impact assessments. Preparatory activities have commenced in Karmaling Gewog in Dagana, where a groundbreaking ceremony was held in 2023, bringing renewed hope to local communities. The project is also expected to affect areas within Tsirang District.^[7]

The reservoir-based design gives the Sunkosh project a strategic advantage over Bhutan's existing run-of-the-river hydropower plants. Unlike run-of-the-river schemes, which generate electricity based on natural river flow and experience reduced output during dry seasons, a reservoir allows energy generation to be managed in response to demand, particularly during peak export periods. This dispatchable capacity is considered increasingly valuable as India's electricity grid incorporates more intermittent renewable sources such as solar and wind, creating demand for flexible generation that can be ramped up or down as needed.^[8]

Environmental and Social Considerations

The construction of a major reservoir in the Himalayan foothills raises significant environmental and social concerns. The inundation area would displace communities and affect agricultural land in Dagana and Tsirang, two of Bhutan's less developed districts. Ecological sensitivities — including the impact on river ecosystems, downstream water flows, and terrestrial habitats — are being assessed as part of the updated feasibility studies. Bhutan's commitment to maintaining at least 60 per cent forest cover under its constitutional mandate adds an additional layer of environmental obligation to large infrastructure projects.

The implementation timeline has not been finalised, and the project's progression will depend on the outcomes of the ongoing reassessments, bilateral negotiations with India, and the government's assessment of lessons learned from the Punatsangchhu projects. If completed, the Sunkosh project would more than double Bhutan's current installed hydropower capacity and transform the country's position as a regional energy exporter.

References

1. "Sunkosh reignites with 4060 MW capacity and Nu 323 bn cost." The Bhutanese.
2. "Government halts 2,560MW Sunkosh project." Kuensel Online.
3. "Sunkosh reignites." The Bhutanese.
4. "2560 MW Sunkosh & 2640 MW Kuri Gongri project." The Bhutanese.
5. "Government halts 2,560MW Sunkosh project." Kuensel Online.
6. "Sunkosh & Kuri Gongri." The Bhutanese.
7. "4060 MW Sunkosh Project undergoes feasibility updates." Kuensel Online.
8. "Sunkosh reignites." The Bhutanese.