The Asian Development Bank has approved a $160 million ordinary capital resources loan that will go towards a solar expansion project in Bhutan.
The expansion project will develop three solar projects in the country with a combined capacity of 310 MW via the country’s first private-majority public–private partnership in its energy sector.
The 120 MW Wobthang and 40 MW Pedseling solar power farms in Bumthang, northern Bhutan, will be constructed by Bhutan-based developer Druk Green Power Corporation (DGPC), while the 150 MW Dramthang solar farm in Lhuentse, northeastern Bhutan, is expected to be developed through a joint venture between DGPC and India’s Tata Power Renewable Energy Limited.
State-owned public utility Bhutan Power Corporation is set to build 46 kilometers of transmission infrastructure to connect the solar farms to the national grid.
ADB’s loan is expected to cover most expenditures, including DGPC’s equity investment in the public-private partnership joint venture. The project is expected to catalyze a further $68.7 million in private equity and commercial debt.
An additional $500,000 grant from the government of Japan via the Innovative Finance Facility for Climate in Asia and the Pacific will fund training and scholarship programs needed for green job creation in Bhutan. ADB’s Technical Assistance Special Fund is also granting an additional $1 million technical assistance grant.
ADB Country Director for Bhutan, Sonomi Tanaka, said the solar expansion project is a turning point for Bhutan’s energy security.
“By scaling up solar energy alongside hydropower, Bhutan can cut costly electricity imports, attract private investment through its first private-majority public-private partnership in the energy sector, and create green jobs for women and youth, building a more resilient and inclusive economy for the long term,” Tanaka said.
Bhutan has been historically reliant on hydropower and forced to import electricity during dry winter months. Peak winter demand nearly tripled between 2021 and 2025 and is projected to exceed a 1 GW deficit by 2030.
The country has set a target of developing 5 GW of solar power by 2040 as it works to diversify its energy mix.
Bhutan’s cumulative solar capacity stood at 21 MW by the end of 2025, up from 3 MW at the end of 2024, according to figures published by the International Renewable Energy Agency (IRENA). The increase follows the commissioning of its first utility-scale solar plant, a 17.38 MW array, in mid-2025.
Other large-scale projects underway include the 120 MW Jamjee solar project, under development by local firm Rigsar Construction and India’s HILD Energy. DGPC is also collaborating with India’s Carbon Resources Private Limited on new solar and hydropower projects in Bhutan with capacities between 100 MW and 250 MW.
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