Hydropower may be the economy’s top export, but the entire revenue generated by the sector is lesser than the payment made to import fossil fuel, showing a negative balance of trade in energy.
When it comes to energy trade balance, Bhutan is importing more than its export by almost Rs.800M. The hydropower sector, last year, earned an annual revenue of Rs.7.6B after netting off the loan repayment. On the other hand, the economy imported energy in the form of fossil fuel worth Rs.8.4B.
This shows a deficit of Nu.800M.
Annually, the hydropower sector earns, on an average, a gross income of Rs.10 B. However, the net income works out to only about Rs.7 B after paying back the loans taken to build them.
Besides, showing a negative balance of trade, this phenomenon also puts pressure on the rupee reserve, because the entire rupee generated by the hydropower sector is being utilized in importing fossil fuel.
The total value of fuel imports showed an increase of Rs 600M, despite the ban on car imports and fall in global fuel prices around mid last year. The value of fuel imports is expected to increase further after the ban on import of cars was lifted in July last year.
While value of fuel imports has increased, total revenue generated by the hydropower sector shows a decrease of almost Rs.1 B in 2014. “The decrease was because of hydrological reasons as the year experienced relatively less rainfall compared to 2013,” said Druk Green Power Corporation’s Managing Director, Dasho Chhewang Rinzin.
Dasho said 2013 was one of the best years for the hydropower sector as it enjoyed more rainfall. In 2013, the hydropower sector earned Rs 11B gross revenue.
