World Bank approves USD 815 million for Bhutan's Dorjilung hydropower project

The World Bank approved USD 815 million in financing for the 1,125 MW Dorjilung Hydropower Project in eastern Bhutan, developed by Tata Power with Druk Green Power Corporation. The project will expand Bhutan's exportable clean electricity surplus primarily to India, supporting long-term power purchase agreements that reduce Indian grid reliance on fossil-based peak generation.

The World Bank approved USD 815 million in financing for the 1,125 MW Dorjilung Hydropower Project, one of Bhutan's largest clean energy investments to date. Developed by Tata Power in partnership with Bhutan's Druk Green Power Corporation, the run-of-the-river facility in eastern Bhutan is designed to limit environmental disruption while ensuring reliable generation. The financing includes long-term instruments that lower project risk and improve bankability, and follows Bhutan's hydropower governance framework mandating strict environmental and social safeguards across phased construction.

Indian power utilities and the broader grid are directly affected, as Bhutan's expanded hydropower surplus will be exported primarily to India. National utilities, international contractors, and multilateral monitoring teams oversee construction to ensure compliance with sustainability and safety standards. By enabling stable, long-term power purchase agreements, the project strengthens Indian grid resilience and reduces reliance on fossil-based generation during peak demand. Tata Power, as a developer, gains exposure to multilaterally de-risked cross-border renewable infrastructure within South Asia's integrated electricity trade framework.

Indian power purchasers and infrastructure investors should monitor construction milestones, since generation will commence only after completion of key civil and transmission works under the phased schedule. Affected entities should track the structure of the long-term power purchase agreements that will determine import pricing and volumes for Indian buyers. The project sets a benchmark for multilateral de-risking of large renewable assets in South Asia, so policymakers and businesses should watch how this model unlocks private participation and regional energy integration.

Key figure — World Bank financing: USD 815 million for the 1,125 MW Dorjilung Hydropower Project