Reliance Power Ltd. has signed a commercial term sheet for a long-term Power Purchase Agreement (PPA) with Green Digital Private Ltd. (GDL), a subsidiary of Bhutan’s Druk Holding and Investments Ltd. (DHI), marking a major milestone in cross-border renewable energy collaboration.

The agreement paves the way for the development of Bhutan’s largest solar power project, a 500 MW facility to be established under a 50:50 joint venture between Reliance Power and DHI. With a projected capital investment of up to ₹2,000 crore, the project represents the largest private sector foreign direct investment (FDI) in Bhutan’s solar energy sector to date.

To be developed under the Build-Own-Operate (BOO) model, the project is expected to roll out in phased tranches over the next 24 months. The initiative aligns closely with Bhutan’s sustainable development goals and the broader regional push for clean energy transition across South Asia.

“This partnership with Bhutan is a significant step in advancing India’s regional energy diplomacy while contributing to Bhutan’s vision for a greener future,” Reliance Power said in a statement.

The joint venture builds on a prior agreement initiated in October 2024, when Reliance Enterprises — co-promoted by Reliance Power Ltd. and Reliance Infrastructure Ltd. — entered into a strategic partnership with DHI to jointly develop solar and hydropower assets in Bhutan. The collaboration reflects a long-term commitment to enhancing renewable energy infrastructure in the Himalayan nation, which is already known for its hydro-rich energy portfolio.

In addition to the solar initiative, the partnership includes the development and operation of the 770 MW Chamkharchhu-I hydroelectric project, a run-of-the-river facility. This project will be structured under a long-term concession model, further supporting Bhutan’s national energy strategy and ensuring long-term energy security.

Green Digital Private Ltd., wholly owned by DHI, will serve as the Bhutanese counterpart in executing both the solar and hydro projects. DHI, the investment arm of the Royal Government of Bhutan, plays a pivotal role in the country’s economic and infrastructural development.

The landmark PPA underscores growing regional cooperation in renewable energy and sets a precedent for large-scale clean energy investment in Bhutan, positioning both nations as key players in South Asia’s low-carbon energy future.