This comes on the heels of a major, recently approved World Bank Group financing package for the Dorjilung hydropower project. This project would make it Bhutan’s largest single hydropower development. This drench project on the Kurichhu River in eastern Bhutan. It’s going to produce more than 4,500 gigawatt-hours of new electricity annually. The initiative aims to achieve a 40% increase in overall clean power generation. It is intended to increase energy exports by 42%.
The financing package includes a notable $150 million grant from the International Development Association (IDA). In addition, it features a $200 million enclave loan from International Bank for Reconstruction and Development (IBRD) and a $300 million A-loan from the International Finance Corporation (IFC). This joint initiative emphasises the willingness of the World Bank Group to back Bhutan in realising its energy goals.
Economic Growth and Job Creation
Combined with the Dorjilung project, Bhutan’s energy capacity will soon double. Moreover, it will create thousands of jobs both during its construction and through its future operational phases. This new jobs creation is especially critical for the Mongar and Lhuentse districts. These communities usually suffer from greater rates of poverty and unemployment than the national average. The millions of new jobs created will have an epic positive impact on adjacent economies.
Local businesses are supposed to benefit from the project. In addition, throughout both the construction and operation phases, these enterprises will plug directly into multiple supply chains. This meaningful engagement will enhance their long-term resilience and sustainability.
“The Dorjilung Hydroelectric Power Project is a national priority and will be transformational for Bhutan – delivering clean electricity, spurring economic growth and advancing our carbon-negative commitment,” – Lyonpo Lekey Dorji.
Infrastructure Improvements
Beyond energy generation, the Dorjilung project will bring badly needed infrastructure improvements to the Mongar and Lhuentse districts. These freight upgrades should include community impacts, including improving access to markets and essential services like hospitals for nearby local communities. By addressing transportation challenges, the project aims to alleviate some of the economic disparities faced by residents in these districts.
In addition to bolstering local commerce, this renewed infrastructure is expected to help reverse out-migration rates. The Dorjilung Electricity Generation Project is an opportunity to make life and work in Dorjilung safer, easier and more productive. This will further assist with keeping talent in these communities.
Strategic Partnership and Global Support
Through the Dorjilung project, RGoB and its private sector partners hope to create a robust PPP-model for future hydropower development in Bhutan. This partnership between public agencies and private investment is an important step to using federal resources to their maximum extent and building our national competitive advantages.
Xavier Furtado emphasized the importance of this collaboration, stating, “The World Bank Group is bringing the full strength of its institutions – IDA, IBRD and IFC – to support the Dorjilung Hydropower Project in Bhutan.”