World Bank Group approves USD 815 million financing package for Bhutan’s 1,125 MW Dorjilung hydropower project

The World Bank Group’s Boards of Executive Directors approved an innovative USD 815 million financing package to support Bhutan’s 1,125 MW Dorjilung Hydroelectric Power Project, aimed at expanding hydropower generation, enabling regional clean energy trade, and creating jobs while minimising sovereign borrowing and mobilising private capital. Located on the Kurichhu River in eastern Bhutan, the project is expected to generate more than 4,500 GWh of electricity annually, increasing Bhutan’s energy production by 40% and energy exports by 42%. It is designed to help close Bhutan’s winter seasonal energy gap by reducing reliance on energy imports and to generate surplus power for export to India during summer and monsoon periods. Dorjilung will be developed as Bhutan’s largest hydropower public-private partnership through Dorjilung Hydro Power Limited, a special purpose vehicle owned by Druk Green Power Corporation (60%) and Tata Power (40%), with the overall structure expected to mobilise around USD 900 million from private investors; the World Bank Group component includes a USD 150 million grant and USD 150 million credit from the International Development Association (IDA) and a USD 15 million enclave loan from the International Bank for Reconstruction and Development (IBRD) to the Government of Bhutan, plus a USD 200 million IBRD enclave loan and a USD 300 million A loan from the International Finance Corporation (IFC) to Dorjilung Hydro Power Limited.