The project is estimated to cost of Nu 145 billion
The construction of the 1,125 MW Dorjilung Hydropower Project, spanning Lhuentse and Mongar Dzongkhag, is set to commence by next year end.
Preparatory activities, including building access roads, ensuring power supply, and setting up transit camps, are expected to commence in the second quarter of the year, according to the Druk Green Power Corporation (DGPC).
DGPC and Tata Power Company Limited signed a Memorandum of Understanding (MoU) on November 19 this year to develop 4,500 MW of hydropower and 500 MW of solar projects.
A priority project, the Dorjilung project is the first initiative to be implemented under this agreement.
The Detailed Project Report (DPR), initially prepared in 2015, was updated this year with financial assistance of USD 4 million from the World Bank. The revised DPR incorporates international best practices, Bhutan’s hydropower development guidelines, and the World Bank’s safeguards requirements.
The updated DPR is currently under review for final approval.
“We have started initial consultations of the joint venture partnership and financial structuring,” said a DGPC official.
The project’s total estimated cost of Nu 145 billion includes associated transmission infrastructure to evacuate power from the hydropower plant.
The financing model is structured on a 70:30 debt-to-equity ratio, with the World Bank playing a pivotal role in leading the financial structuring, as requested by the Bhutanese government.
Approvals for land acquisition, environmental impact assessments, and social clearances are in progress.
The hydropower project has received strong support from both the government and local communities, according to DGPC.
The construction of the Dorjilung Hydropower Project is part of Bhutan’s efforts to harness its hydropower potential and enhance energy generation for domestic use and export.
In addition to Dorjilung, the DGPC-Tata Power partnership plans to develop several other projects, including the 740 MW Gongri Reservoir, the 1,800 MW Jeri Pumped Storage, and the 364 MW Chamkharchhu-IV projects.
