PFC Sanctions Rs 48 Billion Loan for Bhutan Hydro Project

01 Oct 2025 CW Team

Bhutan-based Kholongchhu Hydro Power Ltd (KHPL) has signed a Rs 48.3 billion term loan agreement with state-owned Power Finance Corporation (PFC) to fund its 600 MW Kholongchhu Hydropower Project. The deal also includes a standby credit facility of Rs 9.5 billion.

KHPL is a strategic partnership with Druk Green Power Corporation Ltd (DGPC) holding 60 per cent and Tata Power Company Ltd holding 40 per cent. The total project cost is estimated at Rs 69 billion, including financing charges, with commissioning targeted for 2029–30.

This landmark deal marks PFC’s first cross-border financing in Bhutan and strengthens clean energy cooperation between India and Bhutan. Under the agreement, PFC will act as the sole lender.

Located in Trashiyangtse Dzongkhag, the project is expected to generate 2,524 million units of electricity annually. It will help meet Bhutan’s winter power demand while allowing surplus electricity exports to India during summer months.

Construction is already underway, with civil contracts awarded and works commenced on 1 January 2025. Power evacuation will be facilitated by a 145 km, 400 kV double-circuit transmission line connecting the project to the Goling pooling station, to be built by Bhutan Power Corporation Ltd.

DGPC, a subsidiary of Druk Holding and Investments Ltd, currently operates 3,473 MW of hydropower capacity. With an ambitious vision of adding 15,000 MW of hydropower and 5,000 MW of solar over the next decade, DGPC remains central to Bhutan’s clean energy strategy.

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