Sources indicate that the Adani Group is insisting on acquiring a majority stake, as high as 60 percent, in the Wangchhu project
The Druk Green Power Corporation (DGPC) has clarified that the Memorandum of Understanding (MoU) signed with India’s Adani Group on the development of the Wangchhu Hydropower Project does not include specifics on the shareholding structure for the joint venture project. In June this year, the DGPC and the Adani Group signed the MoU to take forward the development of the Wangchhu Hydropower Project in Chukha.
Two options are currently being considered for the Wangchhu project: a 570 MW run-of-the-river scheme or a 900 MW reservoir-based scheme.
The Detailed Project Reports for both options are ready. The two parties will discuss the technical and cost parameters.
While details about the distribution of shares between the DGPC and the Adani Group are unclear, sources indicate that the Adani Group is insisting on acquiring a majority stake, as high as 60 percent, in the Wangchhu project.
However, discussions on project structuring and ownership stakes are yet to commence, according to DGPC officials.
A DGPC official confirmed that the topic of shareholding has not been broached since the signing of the MoU. “The issue of shareholding in the Wangchhu project has not yet been raised,” the DGPC official said.
Bhutan has been selective in partnering with renowned companies to serve as strategic partners in developing its extensive hydropower resources. This strategic partnership model allows the country to choose partners based on reputation rather than through a competitive bidding process.
“The strategic partner is expected to leverage its market reputation to secure debt financing and help arrange off-take agreements for the surplus power generated during the summer months,” the official said.
DGPC intends to maintain a majority stake in such partnership projects. The strategic partner’s role would include facilitating non-recourse, project-based debt financing, guaranteeing Bhutan’s first right to firm power, and securing an export market for surplus electricity during the summer.
Officials said that as discussions on the Wangchhu project commences, clarity on shareholding will emerge, ensuring a well-structured and mutually beneficial partnership.
In a related development, the DGPC recently entered into a strategic partnership with Tata Power for the 600 MW Khorlochhu Hydropower Project—erstwhile Kholongchhu project.
According to the agreement, the DGPC will hold 60 percent equity stake while Tata Power will hold the remaining 40 percent.
