India’s Reliance Group in agreement to develop hydropower in Bhutan

Indian financial firm Reliance Group has entered into a strategic partnership agreement with Druk Holding and Investments (DHI), the commercial and investment arm of the Royal Government of Bhutan, to bolster investment in the renewable and green energy landscape of Bhutan, including hydropower generation.

The partnership between Reliance Group and Druk Holding will focus on green energy generation, specifically solar and hydropower initiatives, while also exploring new green technologies.

Reliance Group will collaborate with government-owned companies in Bhutan to implement infrastructure projects that support Bhutan's net-zero goals.

Reliance Group, Reliance Power and Druk Holding will jointly develop the 770MW Chamkharchhu-1 hydro project, classified as a run-of-the-river project. Bhutan's current installed power generation capacity sits at 2,452MW. Under the partnership, the companies will also develop 500MW of solar generation.

Reliance Group also announced the establishment of a new flagship company, Reliance Enterprises, dedicated exclusively to promoting investment in Bhutan's renewable and green energy sector. Jointly promoted by Reliance Infrastructure and Reliance Power, Reliance Enterprises will focus on enhancing sustainable energy solutions and implementing smart distribution and metering systems throughout Bhutan.

Bhutan, which is highly vulnerable to the effects of climate change, has committed to increasing energy access without raising carbon emissions. It is one of only three net carbon-negative countries in the world, as it sequesters much more carbon than it emits, thanks to substantial hydropower capacity and the forests that cover 71% of the country, according to the European Investment Bank (EIB).

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In April, EIB signed its first-ever investment support for Bhutan, a 30-year loan for €150 million ($160.1 million). The financing will back the construction of small to mid-size run-of-river hydropower plants and solar photovoltaic generation to help diversify the country’s power mix.

The EIB financing will support the installation of an estimated 310MW of hydropower and solar power capacity. In the first year of operation, the facilities are expected to generate around 670GWh. Increasing solar generation will reduce the potential need for energy imports during the dry season, when river flows and hydropower generation capacity are reduced.

In June, Druk Green Power Corporation (DGPC) and Tata Projects signed an agreement to resume development of the 600MW Kholongchhu Hydropower project, after years of suspension.

In August, the first two turbine-generator units began operating at the 1,020MW Punatsangchhu-II Hydroelectric Project, 13 years after the intergovernmental agreement between Bhutan and India was signed.

This signaled the commissioning of one of the most eagerly anticipated mega hydropower projects in the country, DGPC said. The next phase will involve integrating these turbines with the electrical and communication systems, leading to full-scale energy production. By December, all six turbines are expected to be operational and will start feeding power into the grid.

Originally published by Sean Wolfe on hydroreview.com