Tata Power and DGPC to Build 600 MW Khorlochhu Hydropower Project

Indian firm Tata Power and  Druk Green Power Corporation (DGPC) have joined hands to develop the 600 MW Khorlochhu Hydropower Project in Bhutan, previously known as the Kholongchhu project.

This collaboration marks a significant step in enhancing regional energy security and fostering sustainable development. In the partnership, DGPC will hold a 60 percent equity stake, while Tata Power will invest 40 percent. The estimated cost of the project, including financing charges, is approximately Nu 70 billion.

Construction is projected to take five years, with all necessary statutory approvals already secured from the governments of Bhutan and India. Tata Power, one of India’s largest integrated power companies, and DGPC have previously worked together on the 126 MW Dagachhu Hydropower Plant in Bhutan. The Definitive Agreement for the Khorlochhu project was finalised on July 29, 2024, in Mumbai, India, by Dr. Praveer Sinha, CEO and Managing Director of Tata Power, and Dasho Chhewang Rinzin, Managing Director of DGPC.

Dr. Sinha described the partnership as a landmark alliance, emphasising that the Khorlochhu project will enhance regional energy security and contribute to a greener future. He highlighted Tata Power’s commitment to sustainable energy development. Dasho Rinzin underscored the strategic importance of this project for Bhutan, aligning with the country’s goal to become a high-income GNH (Gross National Happiness) economy by 2034. He also noted that the project will open new investment avenues and leverage Bhutan’s vast hydropower and solar potential.

The partnership will help Bhutan access the evolving Indian energy market and expand regional market opportunities. The Khorlochhu Hydropower Limited will enter into long-term Power Purchase Agreements (PPAs) with Tata Power Trading Corporation Limited, a wholly owned subsidiary of Tata Power, for exporting summer surplus power to India and with Bhutan Power Corporation Limited for domestic power sales during the winter months.

Additionally, Tata Power has established a successful joint venture with Power Grid Corporation of India Limited for a 1,200 km transmission line that will transport electricity from Bhutan to Delhi. Once operational, the Khorlochhu Hydropower Project will address Bhutan’s winter electricity needs and support India’s rising power demands during the summer.

This investment reinforces the clean energy collaboration between India and Bhutan and aligns with Tata Power’s sustainable energy initiatives, contributing to its goal of carbon neutrality. The project also supports Bhutan’s ambitious target of achieving 20 GW of hydropower generation capacity by 2040, marking a significant milestone in the country’s energy development strategy.