The World Bank Group’s Board of Executive Directors has approved long-term financing for the 1,125 MW Dorjilung Hydropower Project (DHPL) in Bhutan, a major cross-border clean energy initiative co-owned by Druk Green Power Corporation (DGPC) and The Tata Power Company Limited (Tata Power). Dorjilung Hydro Power Limited has been established as a special purpose vehicle (SPV), with DGPC holding 60 percent and Tata Power holding 40 percent equity.
The project is expected to strengthen clean energy cooperation between Bhutan and India, support regional energy security, and expand access to low-carbon electricity. Dorjilung will be Bhutan’s largest hydropower development structured under a public-private partnership (PPP) model.
Once commissioned, the Dorjilung Hydropower Project is forecast to generate more than 4,500 GWh of electricity annually, significantly increasing Bhutan’s installed power capacity. The project is expected to expand the country’s generation capacity by nearly 40 percent, reinforcing Bhutan’s role as a dependable exporter of renewable energy to India. Around 80 percent of the annual electricity generated is planned to be supplied to India.
Tata Power Trading Company Limited, a wholly owned subsidiary of Tata Power, will handle the import of electricity into India and manage the onward distribution in accordance with applicable commercial arrangements. The approved World Bank Group financing package includes support from multiple institutions.
The funding structure comprises a $150 million grant and a $150 million credit from the International Development Association (IDA), along with a $15 million enclave loan from the International Bank for Reconstruction and Development (IBRD) to DGPC (Government of Bhutan). In addition, an IBRD enclave loan of $200 million and an International Finance Corporation (IFC) loan of $300 million have been sanctioned to Dorjilung Hydro Power Limited (DHPL). Remaining financing requirements will be met through additional funding from market participants.
The approval is viewed as an endorsement of the project’s technical and financial framework. With long-term funding visibility now in place, Tata Power and DGPC are expected to progress development with greater financial stability and execution discipline, while maintaining a focus on long-term stakeholder value.
Dorjilung also reinforces decades of energy collaboration between Bhutan and India, demonstrating how regional partnerships can deliver both environmental and economic benefits while accelerating South Asia’s clean energy transition.
Beyond power generation, the project is expected to create substantial employment during construction and operations, support local enterprise development, and contribute to livelihoods in Bhutan’s Mongar and Lhuentse districts. The development is positioned as a high-impact infrastructure initiative that combines public policy objectives with commercially structured execution involving multilateral institutions and private sector participation.
The Tata Power Company Limited, part of the Tata Group, is India’s largest private integrated power company with a diversified portfolio of 15.9 GW. Its operations span generation (renewable and conventional), transmission, distribution, trading, storage solutions, and solar cell and module manufacturing. Tata Power has 7.0 GW of clean energy generation, accounting for 44% of its installed capacity, and is committed to achieving Net Zero by 2045. The company serves approximately 13 million customers across India through partnerships and operations in generation, transmission, and distribution.
