- Oct 24, 2025
- by Ashley Chen
- 136
Bhutan’s Clean Energy Boom and Future Power Outlook
Bhutan is entering a new era of clean energy with major commitments from Adani, Reliance, and Tata to develop large-scale hydro and solar projects across the kingdom. The combined ventures — including Adani’s 570 MW Wangchhu, Tata’s 600 MW Kholongchhu, and Reliance’s 500 MW solar farm — are set to bring over 1.9 GW of power online by the early 2030s. Together with local solar projects like the 22.38 MW Sephu plant, these developments will help Bhutan reach its 2040 goal of 25 GW installed capacity and strengthen its standing as a carbon-negative green energy leader.
Bhutan’s clean energy ambitions have entered a new phase of growth, marked by significant commitments from some of India’s biggest power players — Adani, Reliance, and Tata — alongside a rising number of local renewable projects that are already feeding power into the grid. The combined effect of these ventures will redefine Bhutan’s energy landscape over the next decade, positioning the kingdom as South Asia’s most promising green powerhouse.
Adani’s 570 MW Wangchhu Hydropower Project
In September 2025, Druk Green Power Corporation (DGPC) and Adani Power signed the shareholders’ agreement and concession for the 570 MW Wangchhu Hydropower Project — the first major project under their broader 5 GW partnership formalised in May 2025. Construction is expected to commence in 2026 with a five-year development timeline, setting the stage for the first power generation by around 2031.
This project will be Bhutan’s first major hydro collaboration with a private Indian conglomerate under the new bilateral investment framework, designed to attract foreign capital while retaining Bhutanese control through DGPC.
Reliance Power’s 500 MW Solar Partnership
Reliance Power, under its May 2025 joint venture with Druk Holding and Investments’ subsidiary Green Digital, is taking the lead on Bhutan’s largest solar investment to date — a 500 MW solar farm to be built in phases across western and central Bhutan. The company has signed a commercial term sheet for a long-term Power Purchase Agreement (PPA) and initiated EPC tendering.
Construction is expected to proceed in tranches over 24 months, with the first phase generating power by late 2026 and the full 500 MW coming online by mid-2027. This project marks Bhutan’s first large-scale diversification beyond hydropower, reflecting the government’s strategy to balance its renewable mix.
Tata Power and the 600 MW Kholongchhu Project
Tata Power strengthened its presence in Bhutan through a series of moves that culminated in July 2025, when it acquired a 40% stake in Kholongchhu Hydro Power Limited (KHPL). The project, based in Trashiyangtse, is one of Bhutan’s most technically complex ventures, jointly developed with DGPC.
To finance it, KHPL secured a nu. 48.29 billion (approximately USD 580 million) term loan from India’s Power Finance Corporation in September 2025, ensuring that construction can move forward with full financial backing. With an estimated five-year build, the 600 MW project is slated for commissioning around 2030–2031.
Chamkharchhu-I and Emerging Hydro Projects
Reliance Power’s October 2024 strategic agreement with DHI also includes the 770 MW Chamkharchhu-I run-of-river project in central Bhutan. DGPC has already invited consultancy services for the design and environmental assessment, indicating that groundwork is active. Once full-scale construction begins, Chamkharchhu-I will add yet another significant boost to Bhutan’s hydropower exports to India, potentially bringing its first power by the early 2030s.
Local Solar and Wind Projects Already Powering Bhutan
While large foreign-backed projects dominate the headlines, Bhutan’s locally implemented renewables are already contributing meaningful output. The country’s first utility-scale solar plant at Sephu in Wangdue Phodrang came online in July 2025 with a capacity of 17.38 MW.
A second phase of 5 MW followed soon after, bringing the total design capacity to 22.38 MW. Alongside this are smaller projects such as the 180 kW Rubesa ground-mounted solar array and a 600 kW wind installation at Rubesa, which together represent Bhutan’s growing domestic expertise in renewables.
How Much Power Is Coming Online
In the near term, solar energy will drive most of Bhutan’s new capacity. The 500 MW Reliance-DHI solar farm, together with Sephu’s 22.38 MW, brings a combined 520–525 MW of additional generation expected to come online by mid-2027. These projects are designed to supplement Bhutan’s hydro output during dry winter months and reduce dependency on imported energy.
In hydropower, Adani’s 570 MW Wangchhu and Tata’s 600 MW Kholongchhu will each take around five years to complete once full works commence, projecting their commissioning between 2030 and 2031. Chamkharchhu-I’s 770 MW could follow soon after, depending on the pace of its upcoming agreements and financing.
Bhutan’s National Energy Vision for 2040
According to the National Energy Policy released in June 2025, Bhutan aims to expand its total installed capacity to 25 GW by 2040 — 20 GW from hydropower and 5 GW from solar and wind. This strategy focuses on balancing export-oriented hydro projects with localised renewable generation to ensure year-round energy security. With private partnerships now in motion, Bhutan’s renewable portfolio is on track to more than double its current installed capacity of 2.3 GW within the next decade.
The Road Ahead
The next two years will see solar take the lead in diversifying Bhutan’s grid, while hydropower continues its steady long-term expansion. The 500 MW solar partnership with Reliance will immediately ease winter deficits and pave the way for technological collaboration and job creation. Meanwhile, Adani’s and Tata’s hydro projects will fortify Bhutan’s export revenues in the 2030s, supporting the kingdom’s broader goal of becoming a carbon-negative, renewable energy hub in the Himalayas.
Bhutan’s Energy Project Timeline (2024–2032)
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2024 — Reliance–DHI signs for Chamkharchhu-I (770 MW)
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2025 (May–Sep) — Adani 570 MW Wangchhu, Tata acquires 40% KHPL, DGPC–Adani 5 GW JV signed
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2026 — Construction start for Wangchhu and Reliance Solar
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2027 — Full operation of 500 MW Reliance Solar
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2030 — Tata’s 600 MW Kholongchhu Hydro operational
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2031 — Adani’s 570 MW Wangchhu Hydro operational
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Early 2030s — Chamkharchhu-I (770 MW) expected to come online
Significance of All These Power Projects in Bhutan
These new power projects signal a major transformation for Bhutan — economically, environmentally, and geopolitically. Here’s what they really mean for the kingdom:
1. Economic Growth and Diversification
For decades, Bhutan’s economy has relied heavily on hydropower exports to India. By bringing in major private players like Adani, Reliance, and Tata, Bhutan is diversifying not only its energy sources but also its investment landscape. These projects will inject billions into infrastructure, create skilled jobs, and expand Bhutan’s industrial base. The long-term export revenue from these new plants could significantly strengthen Bhutan’s GDP and foreign reserves.
2. Energy Security and Year-Round Stability
Hydropower, while clean, is highly seasonal — production drops sharply in winter when river levels fall. The introduction of solar and wind projects helps Bhutan stabilise supply throughout the year. The 500 MW Reliance solar farm and local solar-wind installations like those in Sephu and Rubesa will cover winter shortfalls and reduce the need to import power during dry months.
3. Technological Leap and Capacity Building
These collaborations bring more than just capital — they transfer knowledge. By working alongside Indian giants, Bhutanese engineers and institutions such as Druk Green Power Corporation (DGPC) and Druk Holding and Investments (DHI) gain access to new technologies, modern project management systems, and renewable energy expertise. This accelerates Bhutan’s ability to independently develop and maintain future projects.
4. Stronger Bilateral Ties with India
The energy partnership deepens Bhutan–India relations beyond traditional government-to-government hydropower models. The new framework allows private-sector participation while preserving Bhutanese majority control. This balance strengthens trust and sets a new standard for cross-border green collaboration in South Asia.
5. Global Recognition as a Green Powerhouse
Bhutan is already the world’s only carbon-negative nation. These projects reinforce that leadership — showcasing how a small Himalayan kingdom can drive large-scale clean energy transitions. By 2040, when Bhutan reaches its 25 GW renewable target, it will stand as a model for sustainable development, exporting clean energy while maintaining environmental integrity.
6. Foundation for the Future – Beyond Hydropower
Perhaps most importantly, Bhutan is building the foundation for a balanced renewable economy. Hydropower will remain the backbone, but solar and wind will fill critical seasonal gaps and support domestic electrification. The result? A more resilient, self-sufficient energy ecosystem that underpins Bhutan’s vision of Gross National Happiness — sustainable, inclusive, and forward-looking.