Punatsangchhu-III Hydropower Project

The Punatsangchhu-III Hydroelectric Project (P-III) is a planned 920-megawatt hydropower project on the Punatsangchhu river in western Bhutan. In August 2026, Druk Green Power Corporation (DGPC), Bhutan's state generation utility, signed a development agreement for the project with JSW Neo Energy Limited, a subsidiary of India's JSW Group — one of the largest private-sector partnerships in the history of Bhutanese hydropower. The project cost was estimated at the prefeasibility stage at Nu 78 billion (~USD 900 million), with construction targeted to begin in late 2027 and commissioning expected in 2032–33.^[1]

P-III is the third project in the Punatsangchhu cascade, downstream of the Punatsangchhu-I and Punatsangchhu-II projects. Its configuration of four 230 MW units is expected to generate roughly 3,400 million units of electricity annually.^[1]

Project Design

According to the prefeasibility parameters announced at signing, the dam complex will be located near Harachhu, with the powerhouse approximately two kilometres downstream of Relangthang, on the stretch of the Punatsangchhu below the P-II works. The installed capacity of 920 MW (4×230 MW) would make P-III one of the largest plants in the country on commissioning, behind the 1,200 MW P-I (if completed), the 1,020 MW Tala and the 1,020 MW P-II.^[1] Detailed design parameters, including the final cost, are to be settled in the detailed project report phase.

The JSW Partnership

The agreement was signed by DGPC managing director Dasho Chhewang Rinzin and JSW Neo Energy's Sharad Mahendra. The involvement of a private Indian developer marks a departure from the model that built most of Bhutan's existing hydropower fleet, in which the Government of India provided intergovernmental grant-and-loan financing and Indian public-sector undertakings executed the works. The shift toward commercial partnerships follows the financing difficulties and delays of the intergovernmental model — most visibly at Punatsangchhu-I, whose geological problems and cost overruns became emblematic of the country's hydropower debt burden.^[1][2]

Context: Bhutan's Generation Push

The P-III agreement comes as Bhutan confronts a widening gap between domestic electricity demand and supply. Rapid growth in industry, transport electrification and data infrastructure has turned the country into a net importer of power during the winter lean season, when river flows and hydropower output drop; imports more than doubled in the 2025–26 winter. New generation capacity — P-III among the largest components — is central to the government's plan to restore export surpluses and meet demand projected to exceed supply for much of the next decade.^[3]

References

1. "JSW and DGPC sign agreement for Nu 78 bn P-III project." The Bhutanese, August 2026.
2. "Hydropower in Bhutan." Wikipedia.
3. "Bhutan's power exports set to plunge as domestic energy demands outstrip supply." Kuensel via Asia News Network, 2026.