New World Bank-backed project will create 12,000 jobs and modernise rural value chains in Bhutan, promoting environmental governance and corporate sustainability. ESG BROADCAST shares key takeaways.
Regulatory Extract:
The World Bank’s Board of Executive Directors has approved a $34.5 million financing package for Bhutan to strengthen employment and value chains within the country’s Renewable Natural Resources (RNR) sector. Announced on June 13, 2025, the “Accelerate Bhutan’s Job Transformation through Renewable Natural Resource Value Chains Project” aims to transition Bhutan’s agriculture, livestock, and forestry activities from subsistence-based livelihoods to a modern, competitive, and environmentally sustainable economy.
The new initiative will be executed by the Royal Government of Bhutan, focusing on climate-smart technologies, better market access, and institutional capacity development. Approximately 42,000 individuals are expected to benefit, 65% of whom are women. It is projected to create 12,000 full-time jobs, primarily through improved trade mechanisms and value-added production in high-potential chains including dairy, citrus, potato, and forest-based industries.
The project is underpinned by $29.8 million from the International Development Association (IDA) and a $4.7 million contribution from the PROGREEN global fund. This financing will support targeted grants, organisational training, and business development services, especially for women- and youth-led enterprises transitioning into agro-processing and market-oriented services. The programme will also provide labour-saving tools to enhance gender inclusivity in value chain participation.
Cecile Fruman, Acting World Bank Country Director for Bhutan, emphasized that the project will “unlock Bhutan’s green economic potential” by linking producers to new markets, fostering innovation, and improving the country’s competitiveness while maintaining its environmental and carbon-neutral credentials. Joachim Vandercasteelen, World Bank Economist and Task Team Leader, highlighted the emphasis on public-private partnerships and the need to modernise regulatory and quality infrastructure to attract investment and ensure trade compliance.
Operationally, the project is designed to promote climate adaptation and emissions reduction, aligning with Bhutan’s commitment to environmental sustainability. Over a 20-year horizon, the initiative is estimated to mitigate 221,087 tonnes of CO₂ equivalent, primarily by reducing post-harvest losses, increasing the use of climate-resilient practices, and improving processing and packaging standards.
Institutionally, the project will invest in strengthening Bhutan’s public agencies that govern the RNR sector. It will upgrade food safety services, agricultural extension systems, and national frameworks for market information dissemination. These measures are intended to enable the scaling of production, quality control, and export-readiness across multiple value chains.
Strategic significance lies in the project’s alignment with Bhutan’s broader green economic transformation, offering an integrated ESG pathway for rural livelihoods, business innovation, and environmental conservation. For ESG stakeholders, this development reflects a concrete example of green finance deployment, climate risk reduction, and rural socio-economic upliftment through sustainability regulation.
ESG BROADCAST will continue monitoring the updates related to this topic. Stay tuned to be updated on the related policy and pivotal regulatory shift.
