Wangchhu Hydroelectric Project To Power A Stronger India-Bhutan Bond
Newzdaddy Business Updates
Adani Power, India’s largest private power producer, and Druk Green Power Corp. Ltd. (DGPC), Bhutan’s state-owned generation utility, today signed the Shareholders Agreement (SHA) for setting up a 570 MW Wangchhu hydroelectric project in the Himalayan Kingdom of Bhutan. An in-principle understanding on the Power Purchase Agreement (PPA) was also initialled. Most importantly, the developers also signed the Concession Agreement (CA) for the project with the Royal Government of Bhutan.
This step is important because hydro projects like Wangchhu need many legal and financial agreements to start. A PPA ensures buyers for the power produced, and the CA gives rights to use land and water for the project. Without these, a project cannot move forward.
These Agreements, signed in the presence of the Hon’ble Prime Minister of Bhutan, Dasho Tshering Tobgay and Mr. Gautam Adani, Chairman, Adani Group, pave the way for Adani Power and DGPC to initiate the implementation of the peaking run-of-river Wangchhu hydroelectric project on a BOOT (Build, Own, Operate, Transfer) model.
The BOOT model means Adani Power and DGPC will build and run the project for a fixed time. After that, they will transfer it to Bhutan’s government. This model has been used in several Indian hydro projects to ensure ownership comes back to the local community.
The Wangchhu project will see an investment of about INR 60 billion in setting up the renewable energy power plant and related infrastructure. With the preparation of the detailed project report already completed, construction work is expected to begin by the first half of 2026, and the completion is targeted within five years of groundbreaking.
Hydropower projects take a long time because of their size. A large dam and tunnels have to be built, and workers face challenges of geography and weather in the Himalayas. The INR 60 billion investment also shows how important the project is for Bhutan and India.
“Bhutan is a role model for the world in sustainable development, and we are very excited to play a leading role in the development of the country’s natural resources through this renewable energy project. The Wangchhu hydroelectric project will critically meet Bhutan’s peak winter demand, when hydro power generation is low. During the summer months, it would export power to India,” said Mr. SB Khyalia, CEO, Adani Power.
Bhutan’s rivers produce more power in summer because of glacier melt and monsoon rain. But in winter, the river flow goes down. This project will help balance that. India, on the other hand, needs extra power in summer for fans, air conditioners, and industries. So, both countries win.
“Bhutan and India have, since the 1960s, worked closely together to harness the huge hydropower potential that Bhutan is endowed with. This cooperation in hydropower has immensely benefited both countries and is considered the cornerstone of the exemplary and friendly relations that the two countries enjoy. As Bhutan endeavours to become a High Income GNH (Gross National Happiness) Country within the next decade, access to reliable and affordable electricity from its renewable energy resources, such as hydropower and solar, will be critical to enable other investments to drive its economic growth. Bhutan, therefore, plans to add another 15,000 MW in hydropower and 5,000 MW in solar generation capacity by 2040. DGPC is therefore happy to be partnering with the Adani Group for establishing the 570 MW Wangchhu hydroelectric project. Considering their technical & financial strength and the immense experience and expertise that the Adani Group brings to the table, the project implementation is expected to be fast-tracked and set a benchmark for other such projects. The project, on completion, will not only help ensure Bhutan’s energy security but also help further strengthen grid connectivity between Bhutan and India,” said Dasho Chhewang Rinzin, MD, DGPC.
Bhutan has already been selling power from projects like Tala, Chukha, and Kurichhu to India. This has earned the country foreign income. Now, with plans to add 15,000 MW in hydro and 5,000 MW in solar, Bhutan is planning for long-term growth. India also gets clean power, which reduces dependence on coal.
The Wangchhu is the first hydroelectric project to be taken up under an MoU that was signed in May 2025 between the Adani Group and DGPC for jointly developing 5,000 MW of hydropower in Bhutan. Adani Group and DGPC are engaged in further discussions for future projects under this strategic partnership.
This MoU shows that Wangchhu is only the beginning. In the coming years, we may see many more hydro projects where Indian companies and Bhutan work together. This partnership will deepen economic ties and make both countries stronger in green energy.
