World Bank Approves Financing for 1,125 MW Dorjilung Hydropower Project in Bhutan

New Delhi: The World Bank Group has approved long-term financing for the 1,125 MW Dorjilung Hydropower Project in Bhutan, a major clean energy initiative jointly developed by Tata Power and Druk Green Power Corporation (DGPC). The project marks a significant milestone in India–Bhutan energy cooperation and strengthens regional clean power security in South Asia.

Dorjilung Hydropower Project is being developed through Dorjilung Hydro Power Limited (DHPL), a special purpose vehicle co-owned by DGPC (60 percent) and Tata Power (40 percent). Once operational, the project is expected to generate over 4,500 GWh of renewable electricity annually, with around 80 percent of the power supplied to India.

This will be Bhutan’s largest hydropower project under the public-private partnership (PPP) model and is projected to increase the country’s installed power generation capacity by nearly 40 percent, further reinforcing Bhutan’s role as a key exporter of clean energy to India.

World Bank Financing Structure

The approved financing package includes:

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

The remaining project funding will be arranged through market-based financing.

Power Supply to India

Tata Power Trading Company Limited, a wholly owned subsidiary of Tata Power, will be responsible for importing electricity from the project into India and managing its distribution. The project enhances India’s access to clean hydropower while supporting its long-term energy transition goals.

Regional Impact and Employment

Apart from strengthening cross-border energy cooperation, the Dorjilung project is expected to create substantial employment during construction and operational phases. It will also stimulate local economic activity and support livelihoods in Mongar and Lhuentse districts of Bhutan.

The project highlights how collaboration between governments, multilateral institutions, and private sector players can deliver scalable, sustainable energy solutions for the region.