Punatsangchhu-II Hydroelectric Project

• Completion:
  The 1020 MW Punatsangchhu-II Hydroelectric Project in Bhutan has been successfully completed.

• Final Synchronisation:
  The last and final unit, Unit 6 (170 MW), was recently synchronized with the power grid.

• Source:
  Information was confirmed by the Embassy of India in Thimphu.

About Punatsangchhu-II Hydroelectric Project

• Type & Location:

  • A 1 GW run-of-the-river hydroelectric power project.

  • Located in the Wangdue Phodrang district of Bhutan, on the right bank of the Punatsangchhu River.

• Development & Agreement:

  • Developed by the Punatsangchhu II Hydroelectric Project Authority.

  • Governed by an Inter-Government Agreement (IGA) between the Royal Government of Bhutan and the Government of India.

• Funding:

  • Funded by the Government of India (GoI).

  • Funding structure: 30% grant and 70% loan at 10% annual interest.

  • Loan repayment: In 30 equal semi-annual installments, starting one year after the project becomes operational.

• Impact:

  • The project has increased Bhutan’s installed power capacity by about 40%, raising it to over 3500 MW.

Strategic and Economic Significance

• Energy Security: Enhances Bhutan's capacity to meet domestic energy needs and increase electricity exports, primarily to India

• Environmental Sustainability: As a run-of-the-river project, it minimizes large-scale flooding and ecological disruption, providing a greener alternative to traditional hydropower

• Economic Growth: Contributes to Bhutan's economic development by increasing its installed power capacity by approximately 40%, surpassing 3,500 MW