Bhutan needs USD 26bn to achieve 20,000 megawatts of energy capacity by 2040. This includes 15,000 megawatts in hydropower energy and 5,000 megawatts in renewable energy like solar and wind. Department of Energy’s Director, Karma Penjor Dorji, shared this during the meet the press session on Friday. He said the government is exploring diverse financing options, including partnerships with major Indian corporations and global financial institutions to fund these large-scale projects.
Talking to the members of the media, the energy director said that for now, the government plans to increase capacity by over 3,000 megawatts by the end of the 13th Five-Year Plan.
He added that, for this, the government has set Nu 527bn outside the plan.
“Our plans do not include the budgets from the government. We will have to find the budget from outside. For this, we will work through debt-equity financing with a 70 per cent debt and 30 per cent equity financing model,” said Karma Penjor Dorji, director at the Department of Energy, MoENR.
He added that the government is considering bilateral and multilateral sources, EXIM bank financing, commercial loans, and corporate and green bonds in the country, among others.
The director also said that the government is reviewing policies to float 49 per cent equity to public and private sectors to raise the budget.
“There was no policy where we can reinvest the money we generated from exporting electricity in new projects. However, if we do not change this policy now, we will face acute financial constraints. Now, we will reinvest a certain amount of revenue generated from exporting electricity in new projects.”
He added that the government is looking into the possibility of debt-financing almost Nu 230bn, which is 50 per cent of the total Nu 527bn required in the next five years.
Tata Group is investing in the 600-megawatt Kholongchhu project through a debt and equity financing model. A memorandum of understanding with the Tata Group is expected to be signed soon.
Bhutan has the capacity to produce 45,000 megawatts of energy including 33,000 megawatts in hydropower energy, 12,000 megawatts of solar energy and 700 megawatts in wind energy.
However, the country has only harnessed about 2,500 megawatts over half a century.
Namgay Dema
Edited by Sherub Dorji
