DGPC updating project reports as Tata Power begins due diligence; ADB financing of USD 250 million to be prioritized next year
The 404-megawatt (MW) Nyera Amari I and II hydropower projects are moving towards the investment and implementation stage, with the government planning to sign the concession agreement within the current fiscal year as project preparation and financing arrangements advance.
The government has allocated the two projects to Druk Green Power Corporation (DGPC) for development, with India’s Tata Power as the strategic partner, in line with the National Energy Policy 2025.
DGPC is nearing completion of the update to the Detailed Project Reports (DPRs), using project preparatory financing secured from the Asian Development Bank (ADB). In parallel, Tata Power has initiated its due diligence study. Once the exercise is completed, the two parties are expected to begin discussions on the Investment and Shareholders’ Agreement, which will establish the framework for their partnership.
The projects have also been included in ADB’s funding pipeline, with the government and project partners expected to pursue financing of USD 250 million as a priority next year. The remaining funding requirement is expected to be mobilised jointly with Tata Power.
The progress marks an important step towards advancing one of Bhutan’s planned hydropower developments, which is expected to strengthen the country’s electricity generation capacity and support its long-term energy export ambitions.
However, further technical studies are required before all project details can be finalised. The Ministry of Energy and Natural Resources (MoENR) said the proposed powerhouse location for Nyera Amari II requires additional assessment, including the possibility of relocation, because coal beds have been identified at the proposed site. The findings of these studies will be important in determining the final project configuration and ensuring that construction proceeds on a technically suitable foundation.
The Nyera Amari development comprises two cascaded run-of-the-river hydropower plants: Nyera Amari I, with a planned capacity of 112 MW, and Nyera Amari II, with 292 MW. Together, they are expected to generate 404 MW of electricity from the Nyera Amari River in eastern Bhutan.
The first project is planned near Trashigang, while the second is proposed in Martshala, Samdrup Jongkhar. The cascaded arrangement is intended to use the river system for power generation across the two stages.
As run-of-the-river projects, the plants are designed to generate electricity using the river’s natural flow, with limited water storage compared with conventional storage-based hydropower projects. Their generation profile will depend on river flows and seasonal water availability, making hydrological assessments and appropriate design important to project planning.
Once developed, the projects are expected to contribute to Bhutan’s domestic electricity supply and export earnings, while new generation capacity is important for meeting future domestic demand and expanding electricity exports.
Tata Power’s involvement is expected to support project development through the strategic partnership with DGPC. According to the MoENR, the due diligence process will help the parties assess the technical, financial, commercial and other risks associated with the investment before negotiating the Investment and Shareholders’ Agreement.
The ADB-supported project preparatory financing is helping DGPC update the DPRs and advance the technical work needed to bring the projects closer to implementation. The updated reports will provide a basis for assessing project costs, engineering requirements, financial viability and potential environmental and social impacts.
The proposed USD 250 million in ADB financing is expected to be pursued as a priority next year, while the remaining funds will be jointly mobilised with Tata Power. The final financing structure will be important in determining how the project costs and investment responsibilities are shared between the partners.
The Nyera Amari projects are part of Bhutan’s broader ambition to expand its hydropower capacity and strengthen its position as a regional supplier of clean electricity. The country’s long-term power development plans envisage a substantial increase in installed generation capacity, with the 2040 power system master plan targeting 25,000 MW.
Tashi Namgyal, Thimphu
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