| Project Detail |
The project readiness financing (PRF) is proposed to complete detailed engineering studies, environmental and social impact assessments, and bid document preparation for two hydropower projects: (i) the Bunakha hydropower project (180 megawatts [MW]) and (ii) the Nyera Amari hydropower project (404 MW). In 2019, these projects were included in Bhutans power system master plan for 2040. The PRFs scope is also aligned with the ADB country partnership strategy for Bhutan.
Project Name Green Power Project Readiness Enhancement
Project Number 56335-001
Country / Economy Bhutan
Project Status Approved
Project Type / Modality of Assistance Loan
The project readiness financing (PRF) is proposed to complete detailed engineering studies, environmental and social impact assessments, and bid document preparation for two hydropower projects: (i) the Bunakha hydropower project (180 megawatts [MW]) and (ii) the Nyera Amari hydropower project (404 MW). In 2019, these projects were included in Bhutans power system master plan for 2040. The PRFs scope is also aligned with the ADB country partnership strategy for Bhutan.
Project Rationale and Linkage to Country/Regional Strategy Bhutan has significant potential hydropower reserves estimated at 23,760 MW, of which only 9.8% has been tapped, resulting in an installed generation capacity of 2,334 MW. This electricity is utilized for domestic consumption while the surplus is exported to India. During the wet season, excess power is sold to India, and its revenue earning sustains the Bhutanese economy. Hydropower exports account for approximately 50% of total exports and contribute to 30-40% of the governments annual revenue. These revenues are the primary source for government spending on socioeconomic development for social services such as healthcare, education, and rural development. Thus, Bhutan has been incentivized to promote hydropower development as the key driver for inclusive economic growth. However, hydropower exports have experienced a decline since 2020 due to rising domestic electricity demand. Increased domestic consumption has led to a reduction in export and total revenues. The domestic demand growth will continue, primarily driven by industrial customers. |
