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Tata Power-Backed Bhutan Hydropower Project Receives $815 Million World Bank Financing

The World Bank has approved long-term financing of $815 million for the 1,125 MW Dorjilung Hydropower Project (DHPL) in Bhutan, marking a major funding milestone for the cross-border clean energy venture involving Tata Power.

DHPL is a special purpose vehicle jointly owned by Bhutan’s Druk Green Power Corporation (DGPC), which holds a 60% stake, and Tata Power, which owns the remaining 40%. The financing package brings together support from multiple World Bank Group institutions.

According to Tata Power, the approved funding includes a $150 million grant, a $150 million credit from the International Development Association (IDA), a $15 million enclave loan from the International Bank for Reconstruction and Development (IBRD) to DGPC on behalf of the Government of Bhutan, a $200 million IBRD enclave loan, and a $300 million loan from the International Finance Corporation (IFC) to DHPL. The remaining funding requirements for the project will be met through a mix of market-based sources.

Once completed, the Dorjilung project will be the largest hydropower facility in Bhutan to be developed under a public-private partnership (PPP) framework. It is expected to generate more than 4,500 GWh of clean electricity annually.

The project is projected to increase Bhutan’s total installed power generation capacity by nearly 40%, reinforcing the country’s role as a dependable supplier of renewable energy to India. Around 80% of the electricity generated from the project is expected to be exported to India under long-term arrangements.