Norway, Japan, ADB to Help Bhutan Manage its Energy, Water Resources

THIMPHU, BHUTAN – The Asian Development Bank (ADB) is working with the governments of Norway and Japan under two different projects to help Bhutan better manage its clean energy and water resources.

“Funding from Norway and Japan, along with ADB’s assistance presents an opportunity to help Bhutan pursue sustainable economic growth while using its key resources to the best possible advantage,” said Tshewang Norbu, Resident Representative of ADB’s Bhutan office.

The Government of Norway is providing a $5.7 million grant under a climate change initiative called Energy+ to increase access to energy, improve energy efficiency, and boost the use of renewable energy in Bhutan.

The funds will be used to help the government prepare a Renewable Energy Master Plan and National Energy Efficiency Policy. It will also support studies into how best to develop the Shongarchhu, Dagachhu-II, and the Manas hydroelectricity plants which are priority projects under the Government of Bhutan’s 11th Five-Year Plan for 2013-2018.

Bhutan relies heavily on run-of-the-river hydropower plants for its energy which means generation falls sharply during the dry season. To improve its energy security, Bhutan needs to diversify its energy sources. Meanwhile, greater energy efficiency will reduce energy waste.

Separately, a $1.5 million grant from the Japan Fund for Poverty Reduction and a $250,000 grant from the Multi Donor Trust Fund under the Water Financing Partnership Facility of ADB will help the National Environment Commission and Department of Agriculture improve its management of water resources.

Demand for water is increasing and climate change is likely to alter weather patterns in Bhutan, putting pressure on the country’s valuable water resources.

The project will also fund the completion of the National Integrated Water Resources Management Plan and the National Irrigation Plan, and support other activities to strengthen water governance. The Government of Bhutan will provide $250,000 for the project with in-kind contributions.

ADB will administer both grants.