The World Bank sanctioned long-term financing of $ 815 million for the 1,125 MW Dorjilung Hydropower Project (DHPL) in Bhutan. DHPL is a special purpose vehicle (SPV) jointly owned by Bhutan’s Druk Green Power Corporation which owns 60% and Tata Power which owns 40%.
Multi-Tiered Financing
The financing package includes a $150 million grant and a $150 million credit from the International Development Association (IDA) and a $15 million enclave loan from the International Bank for Reconstruction and Development (IBRD) to DGPC (Government of Bhutan), as well as a $200 million IBRD enclave loan and a $300 million loan from the International Finance Corporation (IFC) to Dorjilung Hydro Power (DHPL). The balance funding requirements for the project will be arranged from various market participants, Tata Power said on Friday.
Scaling India-Bhutan GE Co-op
The project will be Bhutan’s largest hydropower project to be developed under a public-private partnership (PPP) model and is expected to generate more than 4,500 GWh of clean electricity annually. The project will expand Bhutan’s installed energy capacity by nearly 40 % and further strengthen the country’s position as a reliable exporter of clean energy to India. About 80 % of the annual electricity generation form the Project will be supplied to India.
Tata Power Trading Company, an arm of Tata Power, will be responsible for importing the power into India and managing its onward distribution.