Dorjilung Hydropower Project

The Dorjilung Hydropower Project is a planned 1,125 megawatt (MW) run-of-river hydroelectric power project being developed on the Kurichhu River in Mongar district, eastern Bhutan. The project is being implemented by Dorjilung Hydro Power Limited (DHPL), a special purpose vehicle jointly owned by Bhutan's Druk Green Power Corporation (DGPC) holding 60 percent and India's Tata Power holding 40 percent. At a total estimated project cost of approximately INR 13,100 crore (roughly USD 1.5 billion), it is the largest public-private partnership (PPP) hydropower project ever undertaken in Bhutan and is expected to be the country's second-largest hydropower facility upon completion.^[1]

Project Specifications

The Dorjilung project is designed as a run-of-river scheme with six generating units of 187.5 MW each, for a total installed capacity of 1,125 MW. The project includes a six-hour pondage facility for peaking power generation, allowing it to store water and release it during periods of peak electricity demand rather than generating power at a constant rate. It is expected to generate more than 4,500 gigawatt-hours (GWh) of clean electricity annually.^[2]

The project is located on the Kurichhu (also spelled Kuri Chhu), one of the major rivers of eastern Bhutan. Bhutan already operates the 60 MW Kurichhu Hydropower Plant on the same river, which was commissioned in 2002 with Indian assistance.

Ownership and Partnership Structure

The project represents a significant evolution in Bhutan's approach to hydropower development. While Bhutan's earlier large hydropower projects, such as the Chukha (336 MW), Tala (1,020 MW), and Mangdechhu (720 MW) plants, were developed as intergovernmental projects between Bhutan and India, Dorjilung is structured as a public-private partnership. DGPC, which is wholly owned by the Royal Government of Bhutan, holds the majority 60 percent stake, while Tata Power, India's largest private integrated power company, holds 40 percent. Tata Power has committed an equity investment of approximately INR 1,572 crore.^[3]

World Bank Financing

In January 2026, the Board of Executive Directors of the World Bank Group approved a comprehensive financing package for the Dorjilung project. The package includes:

• USD 150 million grant from the International Development Association (IDA)
• USD 150 million credit from IDA
• USD 15 million enclave loan from the International Bank for Reconstruction and Development (IBRD) to DGPC
• USD 200 million IBRD enclave loan to DHPL
• USD 300 million loan from the International Finance Corporation (IFC) to DHPL

The total World Bank Group financing of approximately USD 815 million is expected to mobilize an additional USD 900 million from private investors, bringing the total financing to over USD 1.7 billion.^[2]

Timeline and Power Export

The project is scheduled for commissioning in September 2031. Upon completion, approximately 80 percent of the electricity generated will be exported to India under long-term power purchase agreements, consistent with the framework governing Bhutan-India hydropower cooperation. The project is expected to expand Bhutan's installed energy capacity by nearly 40 percent.^[1]

Strategic Significance

Hydropower is Bhutan's most significant natural resource and the backbone of its export economy. Revenue from hydropower exports to India constitutes a major share of government revenue and has been central to Bhutan's development strategy since the commissioning of the Chukha plant in 1986. The Dorjilung project is part of a broader effort to develop Bhutan's estimated 30,000 MW of hydropower potential, of which only a fraction has been harnessed to date.

The PPP model used for Dorjilung is being closely watched as a potential template for future hydropower development in Bhutan. Earlier intergovernmental projects, while successful, involved significant sovereign debt to India. The involvement of private capital and multilateral financing institutions in Dorjilung diversifies Bhutan's financing sources and introduces a different risk-sharing structure.

The project also aligns with Bhutan's positioning as a net exporter of clean energy. Bhutan is one of the few countries in the world that is carbon negative, absorbing more carbon dioxide through its forests than it emits. Hydropower exports are central to maintaining this status while generating the revenue needed for the country's continued development.

See Also

• Hydropower in Bhutan
• Druk Green Power Corporation
• Bhutan-India Relations
• Kurichhu Hydropower Plant
• Dorjilung Hydroelectric Project
• Chukha Hydropower Project
• Punatsangchhu-I Hydropower Project
• Punatsangchhu-II Hydropower Project
• Kuri-Gongri Hydropower Project

References

1. World Bank Group Approves Long Term Financing for 1,125 MW Dorjilung Hydropower Project — Tata Power
2. World Bank Group Supports Sustainable Hydropower Development in Bhutan — World Bank (January 2026)
3. Tata Power and DGPC Sign Commercial Agreements for Dorjilung — Tata Power
4. World Bank Group Approves Financing Package for 1125MW Dorjilung — International Water Power