India-Bhutan – First joint hydel project 

#GS2 #BilateralRelations #India-Bhutan 

India and Bhutan took a major step forward for the construction of the 600 MW Kholongchhu project, their first hydropower joint venture project in Bhutan’s less developed eastern region of Trashiyangtse. 


  • It will be a joint venture between Sutlej Jal Vidyut Nigam (SJVN), a Himachal Pradesh PSU, and the Bhutanese Druk Green Power Corporation (DGPC). 
  • The Kholongchhu project is one of four additional projects agreed to in 2008, as a part of India’s commitment to help Bhutan create a total 10,000 MW of installed capacity by 2020. 
  • The inter-governmental agreement for the Kholongchhu project was signed after prolonged negotiations on the structure of the joint venture, in April 2014, and the foundation stone was laid when Prime Minister Narendra Modi travelled to Thimphu a few months later. 
  • According to the agreement finalised, the construction for the Kholongchhu Hydro Electric Power (HEP) project will begin soon, and be completed in the second half of 2025. 
  • It is the first time an India-Bhutan hydropower project will be constructed as a 50:50 joint venture, not as a government-to-government agreement. 


  • So far, Government of India has constructed three Hydroelectric Projects (HEPs) in Bhutan totalling 1416 MW, which are operational and exporting surplus power to India. About three-fourth of the power generated is exported and rest is used for domestic consumption. 
  • India has agreed to assist Bhutan in developing a minimum of 10,000 MW of hydropower and import the surplus electricity from this to India by the year 2020. Currently, there are three Inter- Governmental (IG) model HEPs (Punatsangchhu-I, Punatsangchhu-II and Mangdechhu) under implementation. 


  • Delays in constructing and commissioning hydropower projects in Bhutan by Indian companies have led to the country’s burgeoning national debt. 
  • India’s power-surplus status and the advent of other renewable energies like wind and solar power will make it more difficult for Bhutan to ensure that its hydropower sector becomes profitable. And unless India finds ways to help, it will be accused of the same sort of “debt-trapping” that China is accused of today. 
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