• India
  • Jun 30

Explainer / India-Bhutan hydel projects

A concession agreement for the first Indo-Bhutan joint venture hydroelectric project was signed on June 29, paving the way for the commencement of its construction and other related works.

The concession agreement for the 600 MW Kholongchhu project between the Bhutanese government and the Kholongchhu Hydro Energy Limited (KHEL) was signed in the virtual presence of Minister of External Affairs S. Jaishankar and his Bhutanese counterpart Tandi Dorji, an official statement said.

What are the features of Kholongchhu project?

It is the first hydroelectric project in Bhutan to be implemented under the joint venture model. It will be implemented by Kholongchhu Hydro Energy Limited, a joint venture company formed between Druk Green Power Corporation (DGPC) of Bhutan and Satluj Jal Vidyut Nigam Limited (SJVNL) of India.

The 600 MW run-of-the-river project is located on the lower course of the Kholongchhu river in eastern Bhutan’s Trashiyangtse district.

The project envisages an underground powerhouse of four 150 MW turbines with water impounded by a concrete gravity dam of 95 metres height.

The project is expected to be completed in the second half of 2025.

Describing the agreement as a “milestone”, Jaishankar said the commencement of construction activities of the project will create economic and employment opportunities in Bhutan in this critical time.

Hydropower cooperation

The hydropower sector is the flagship area of India-Bhutan bilateral cooperation, the MEA said.

The development of the first major hydroelectric project in Bhutan started in 1974 when a bilateral agreement was signed between India and Bhutan for the construction of 336 MW Chukha hydel project across river Wangchu in Western Bhutan for meeting the internal power demand and export of the surplus electricity to India. The project was commissioned in 1986-88.

Four hydroelectric projects of bilateral cooperation (336 MW Chukha HEP, 60 MW Kurichhu HEP, 1,020 MW Tala HEP and 720 MW Mangdechhu HEP), totalling over 2,100 MW, are already operational in Bhutan. 

The Mangdechhu hydroelectric project was jointly inaugurated earlier in August 2019 by the prime ministers of India and Bhutan.

About three-fourth of the power generated is exported and rest is used for domestic consumption. Hydropower exports provide more than 40 per cent of Bhutan’s domestic revenues, and constitute 25 per cent of its GDP.

The cooperation between India and Bhutan in the hydropower sector is covered under the 2006 Agreement on Cooperation in Hydropower and the Protocol to the 2006 agreement signed in March, 2009. 

Under this Protocol, the government of India agreed to assist the Royal Government of Bhutan in developing a minimum of 10,000 MW of hydropower and import the surplus electricity from this to India by the year 2020.

In April 2014, an inter-governmental agreement was signed between India and Bhutan for development of four more hydroelectric projects of capacity 2120 MW (600 MW Kholongchhu, 180 MW Bunakha, 570 MW Wangchhu and 770 MW Chamkharchhu) under the joint venture model. 

Noting that the hydropower sector has been the most visible symbol of the mutually beneficial bilateral cooperation between the two countries, Jaishankar said the recently completed 720 MW Mangdechhu Hydro Electric Power Project has brought the Indian government-assisted installed capacity to more than 2,100 MW.

“With continued working together, we are in process of expediting the completion of other ongoing projects including the 1,200 MW Punatsangchhu-1, 1,020 MW Punatsangchhu-2 and now the 600 MW Kholongchhu HEP,” he said.

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