Dechen Dolkar

The construction of the much-anticipated 600 MW Khorlochhu Hydropower Project will commence from November 2024 following the finalisation of the Shareholders’ Agreement between Druk Green Power Corporation (DGPC) and Tata Power Trading Company (TPTC), which was signed on October 28, 2024, in Thimphu.

Under this strategic partnership, the DGPC will hold a 60 percent equity stake, while Tata Power will invest 40 percent. The project’s estimated cost, including financing charges, is around Nu 70 billion, with a five-year construction timeline.

The Managing Director of DGPC, Dasho Chhewang Rinzin, said that the Joint Venture (JV) company has also signed a Power Purchase Agreement (PPA) with TPTC to export surplus summer electricity generation to India. In addition, the JV will enter a PPA with Bhutan Power Corporation to supply electricity to the domestic market.

He said that the concession agreement between the government of Bhutan and Khorlochhu Hydropower has also been finalised and is expected to be signed soon.

“With the Shareholders, Power Purchase, and Concession Agreements completed, the JV company is planning to commence construction activities on the project by November 2024,” said Dasho Chhewang Rinzin.

Following the strategic partnership agreement between DGPC and Tata Power, contractors for the civil works packages have been instructed to mobilise at the project site to initiate construction activities.

Jai Prakash Associates has been appointed as the main contractor for the dam and powerhouse works, while the Valecha-Rigsar JV and Construction Development Corporation Limited (CDCL) will handle the headrace tunnel construction.

Dasho Chhewang Rinzin said that the recruitment of a design engineering consultant is underway, and the project is strengthening its team to oversee construction activities. Additionally, a project management consultant is being recruited to support the project team.

On the sidelines of the Shareholders Agreement signing, the DGPC and the TPTC reached an understanding to import an initial 50 MW of solar power to meet part of Bhutan’s winter energy deficit for 2024-2025 through a bilateral arrangement, an initiative away from the dependency on purchase of power from the Indian energy exchanges.

The volume of bilateral solar power trade is expected to increase in future.

To further bolster Bhutan’s energy goals, the DGPC signed a Memorandum of Understanding with GMR Energy Ltd on October 24, 2024, exploring a strategic partnership to achieve an ambitious target of adding 15,000 MW in hydropower and 5,000 MW in solar generation capacity by 2040.

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