In a landmark move for Bhutan’s renewable energy sector, Druk Holding and Investments Ltd. (DHI) has entered into a Memorandum of Understanding (MoU) with Reliance Group during the Bhutan Innovation Forum. This collaboration aims to achieve a total capacity of 1.2 gigawatts (GW) by developing 500 megawatts (MW) of solar power and 770 MW of hydropower, with projected investments reaching up to USD 1 billion.

Reliance Group, a prominent Indian conglomerate, is poised to leverage its extensive experience, particularly through its subsidiary, Reliance Power. With a robust installed capacity of 5,340 MW—including the 4,000 MW Ultra Mega Power Project in Madhya Pradesh, recognized as the largest integrated thermal power plant globally—Reliance is well-equipped to support Bhutan’s energy goals.

This agreement marks a crucial step toward enhancing Bhutan’s renewable energy framework and promoting regional collaboration in sustainable power generation. The initiative seeks to harness Bhutan’s hydropower potential alongside solar capabilities to meet escalating energy demands.

Described as the onset of a transformative journey, this partnership aims to elevate Bhutan towards becoming a developed and prosperous nation through sustainable energy endeavors. By tapping into its abundant renewable resources, Bhutan aspires to satisfy its energy requirements while addressing climate change challenges.

Over 80 percent of Bhutan’s trade is currently with India, fostering a strong economic interdependence between the two countries. This relationship is particularly beneficial for the renewable energy sector, where India represents a significant energy market, and Bhutan offers substantial production capacity. This synergy is anticipated to further propel Bhutan’s economic and industrial growth.

To facilitate this collaboration, a new entity named Reliance Enterprises will be created, focusing exclusively on promoting investments in Bhutan’s renewable energy sector. This initiative will be jointly spearheaded by Reliance Infrastructure Ltd. and Reliance Power Ltd., highlighting a commitment to advancing green energy projects in the region.

The initiatives detailed in the MoU are set to enhance Bhutan’s energy security while providing reliable and sustainable power. The solar project, slated for Gelephu Mindfulness City, will unfold in two phases, each contributing 250 MW over the next two years. Once completed, this solar installation will become the largest in Bhutan, surpassing all existing projects and reinforcing the country’s dedication to renewable energy.

Site assessments and technical studies are currently being conducted by Reliance, DHI, and external consultants. This endeavor is expected to be one of the most substantial investments in Bhutan’s renewable energy sector, marking a significant foreign direct investment (FDI) from an Indian entity.

In addition to the solar project, the joint venture also encompasses the 770 MW Chamkharchhu-1 hydropower initiative, classified as a run-of-the-river project. This partnership signifies a noteworthy milestone as it represents one of the first collaborations between a private Indian company and a state-owned entity in Bhutan’s energy landscape.

With Bhutan’s current power generation capacity at 2,452 MW, these new projects will significantly enhance the nation’s energy resources. In this joint venture, Reliance Power will hold a 49 percent stake, while DHI will maintain majority ownership with a 51 percent share. The project will follow a concession model in line with government energy policies.

This MoU not only establishes a strategic alliance for renewable energy development but also highlights the potential for future collaborations aimed at sustainable economic advancement. By effectively utilizing its natural resources, Bhutan is positioned to strengthen its role as a leader in renewable energy in the region, contributing to both local and regional energy security and sustainability.