The European Investment Bank (EIB) has approved a substantial EUR 150 million (USD 160.2 million) loan to the government of Bhutan. This financial injection aims to facilitate the construction of solar and hydropower plants within the landlocked South Asian kingdom.
The loan, spread over a generous 30-year period, is earmarked to support the development of 310 MW of small to mid-size run-of-river hydropower and solar photovoltaic projects. By leveraging these funds, Bhutan endeavors to bolster its energy generation capabilities while upholding its crucial role as a net carbon sink, as outlined by the EIB on Wednesday.
Druk Green Power Corp, Bhutan's state-owned hydropower company, will spearhead the implementation of these transformative projects.
“Bhutan is endowed with rich hydropower resources, and the integration of solar energy serves as a complementary endeavor to diversify our power portfolio,” stated a representative from Bhutan's Ministry of Energy. “By incorporating solar energy, we aim to mitigate the impacts of hydro fluctuations and lessen the dependency on power imports during dry spells.”
Beyond its environmental implications, this initiative holds promise for bolstering economic growth. By enhancing Bhutan's ability to export power and extending electricity access to remote communities, the project is poised to foster sustainable development across the nation.
According to insights shared by Druk Green, Bhutan presently exports a staggering 70% of its hydropower output to neighboring India, with hydropower revenues constituting approximately 25% of the national exchequer's income.
