Indian energy company Tata Power has announced a strategic partnership with Bhutan’s Druk Green Power for the development of the 600MW Khorlochhu hydropower project.

Situated on the Kholongchhu River in Eastern Bhutan’s Trashiyangtse district, the project seeks to meet Bhutan’s rising electricity demands and aid India’s renewable energy transition.

The collaboration entails a 40% equity investment by Tata Power in Khorlochhu, a public-private partnership company.

All necessary statutory approvals have been secured, allowing construction to commence immediately.

The project is estimated to cost Rs69bn ($822m), including financing charges, with a construction timeline of five years up to 2029.

The alliance builds on the existing partnership between Tata Power and Druk Green Power, which includes the 126MW Dagachhu hydropower plant in Bhutan.

The Khorlochhu project will address Bhutan’s winter electricity demands and export surplus power to India during summer.

Tata Power’s investment aligns with its “Sustainable is Attainable” initiative, which focuses on achieving carbon neutrality and providing clean energy alternatives to India.

The memorandum of understanding for the project has been signed, and the definitive agreement will follow shortly.

Khorlochhu Hydro Power will also sign long-term power purchase agreements with Tata Power Trading for the export of excess summer power to the Indian market and with the Bhutan Power Corporation for domestic power sales in the winter months.

Tata Power also maintains a successful joint venture with the Power Grid Corporation of India for the 1,200km Tala transmission line, which transports electricity from Bhutan to Delhi.

Tata Power managing director and CEO Dr Praveer Sinha stated: “This is a landmark alliance for Tata Power and Druk Green Power Corporation. The development of the 600MW Khorlochhu hydropower project in Bhutan will provide energy security to the region.

“This project marks a significant step towards building a sustainable energy landscape, underscoring Tata Power’s commitment to a greener future.”