Punatsangchhu-I Hydroelectric Project

India and Bhutan have agreed to further strengthen cooperation in the power sector, with a renewed emphasis on hydropower development and cross-border transmission planning, according to an official statement.

A high-level delegation from Bhutan met Union Power Minister Manohar Lal in New Delhi, where both sides reviewed ongoing projects and discussed future collaboration. A key focus of the talks was the early commissioning of the Punatsangchhu-I Hydroelectric Project, one of Bhutan’s largest hydropower ventures.

The Punatsangchhu-I project, a run-of-the-river scheme on the Punatsangchhu river, is located between 8.5 km and 18.5 km downstream of the Wangdue Phodrang Bridge. Funded by the Government of India on an inter-governmental model, the project involves 40% grant and 60% loan at an interest rate of 10%. It envisages an installed capacity of 1,095 MW (6 × 182.5 MW) with an annual average energy generation of 5,377.45 GWh.

The discussions also covered the way forward for the Sankosh Hydropower Project, another major initiative aimed at enhancing Bhutan’s hydropower potential and supporting India’s clean energy requirements.

Beyond generation projects, both countries reviewed long-term transmission infrastructure planning up to 2040, for which detailed technical consultations are currently underway. The meeting also highlighted the need to streamline approvals for scheduling of power, especially during lean hydrological months in Bhutan, to ensure smoother power trade.