Bhutan : Green Power Development Project
The Green Power Development Project has two components: (i) regional clean power trade, and (ii) renewable energy access for the poor. Under the first component, the Dagachhu hydropower development (a 126-megawatt [MW] run-of-river type) aims to export power from Bhutan to India through the existing grid to India. The rural electrification component will provide access to electricity sourced from hydropower to 8,767 households and facilities with grid extensions, and electricity sourced from solar energy to 119 remote public facilities (e.g., schools, health clinics, and other community facilities) on an off grid basis.
The Dagachhu hydropower development will be promoted by a joint venture company between Druk Green Power Corporation (DGPC) in Bhutan and Tata Power Company (TPC) in India through a public private partnership (PPP). The rural electrification component will be mainly served by Bhutan Power Corporation (BPC), a public utility service company.
Project Details
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Project Officer
Kaoru Ogino
South Asia Department
Request for information -
Country/Economy
Bhutan -
Modality
-
Sector
- Energy
Related Projects
Project Name | Green Power Development Project | ||||||||||||||||||||||||||
Project Number | 37399-013 | ||||||||||||||||||||||||||
Country / Economy | Bhutan |
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Project Status | Closed | ||||||||||||||||||||||||||
Project Type / Modality of Assistance | Grant Loan Technical Assistance |
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Source of Funding / Amount |
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Strategic Agendas | Environmentally sustainable growth Inclusive economic growth Regional integration |
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Drivers of Change | Partnerships Private sector development |
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Sector / Subsector | Energy / Energy sector development and institutional reform - Large hydropower generation |
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Gender | No gender elements | ||||||||||||||||||||||||||
Description | The Green Power Development Project has two components: (i) regional clean power trade, and (ii) renewable energy access for the poor. Under the first component, the Dagachhu hydropower development (a 126-megawatt [MW] run-of-river type) aims to export power from Bhutan to India through the existing grid to India. The rural electrification component will provide access to electricity sourced from hydropower to 8,767 households and facilities with grid extensions, and electricity sourced from solar energy to 119 remote public facilities (e.g., schools, health clinics, and other community facilities) on an off grid basis. The Dagachhu hydropower development will be promoted by a joint venture company between Druk Green Power Corporation (DGPC) in Bhutan and Tata Power Company (TPC) in India through a public private partnership (PPP). The rural electrification component will be mainly served by Bhutan Power Corporation (BPC), a public utility service company. |
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Project Rationale and Linkage to Country/Regional Strategy | Bhutan has substantial clean and renewable hydropower capacity. Theoretical potential hydropower is 26,760 MW, of which only about 6% is being used. Of the total 1,500 MW installed, 80% is exported to India after meeting domestic consumption. Power exports account for the largest source of Government revenue in the form of taxes and dividends from hydropower companies. Despite the nations being net power surplus for export, most rural residents do not have access to electricity. Only 40% of rural households use electricity as their main source of lighting as compared to 96.4% of urban households. Expansion of rural electrification will provide access to more remote rural areas where the costs of investment, operation, and maintenance will be higher due to low population density and unfavorable terrain. Since about 70% of the population lives in rural areas, electricity for all is a significant implementation challenge. Operating subsidies are essential to ensure the sustainability of expanding rural electrification. In Bhutan, subsidies are regulated and provided from royalty revenues yielded from power exports to cross-subsidize electricity prices, in particular for rural domestic customers. The Government distributes the remaining power export revenues to support socioeconomic goals, such as health and education, as well as infrastructure development, e.g., rural roads and bridges. Thus, rural electrification and hydropower export are strongly interrelated with inclusive economic growth and poverty reduction. Expanding generation capacity for export and rural access to electricity will enhance energy and social security. The Government aims for (i) 100% electrification by 2013, and (ii) an additional 10,000 MW of hydropower development and trading by 2020. In rural areas, electricity from hydropower and solar sources will replace kerosene and fuelwood. Given the coal-dominated Indian power market, clean energy development for power export will promote low-carbon energy sources and foster economic cooperation in the South Asia region. Accelerating the development of hydropower for export is of strategic significance for Bhutan's economy. Given the Government's limited fiscal capacity for large infrastructure projects, the hydropower development strategy is to leverage public and private investments through private participation in development projects. This approach is expected to accelerate hydropower development, and generate income for more socioeconomic development. To promote the country's strategy, the project preparatory technical assistance (TA) supported the Government in establishing a policy and institutional framework for public and private participation in hydropower development. The Dagachhu hydropower development is a demonstration PPP facility in line with the Hydropower Development Policy, which is to promote private and foreign investments for hydropower generation in Bhutan. Further TA support will be provided to develop Government capacity for hydropower export. |
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Impact | Sustained inclusive economic growth through promoting cross-border power trade and electricity access. |
Project Outcome | |
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Description of Outcome | Expanded coverage of clean power development |
Progress Toward Outcome | --Project completed. |
Implementation Progress | |
Description of Project Outputs | Dagachhu Hydropower Development and Rural Electrification Attached CDTA: Promotion of Clean Power Export Development - Capacity Building for hydropower - Financial structuring study for medium-size hydropower projects - Preparation of documents for carbon finance |
Status of Implementation Progress (Outputs, Activities, and Issues) | Dagachhu Hydropower Development: The Dagachhu hydropower plant has been operated since March 2015. No houses and buildings were relocated for the plant construction, but 25 households were compensated for partial loss of land for the construction of access roads. There are no outstanding safeguard issues. Rural Electrification: BPC has achieved the target number of households electrified on a grid extension sourced from hydropower electricity. Where there are very remote and economically unviable places for on-grid extensions, the solar home systems were installed. Particularly, the off-grid electrification focused on schools, clinics, and public community facilities. Because of a series of support from ADB and other donors, Bhutan is almost achieving electrification to all the households (As of the end 2014, the national electrification ratio stood at 98%). |
Geographical Location | Dagana Dzongkhag, Tsirang Dzongkhag, Wangdue Phodrang Dzongkhag |
Safeguard Categories | |
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Environment | B |
Involuntary Resettlement | B |
Indigenous Peoples | C |
Summary of Environmental and Social Aspects | |
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Environmental Aspects | The environmental impacts of the rural electrification infrastructure proposed by the Project were assessed by IEE in accordance with ADB's Environment Policy (2002) and Environmental Assessment Guidelines (2003). The overall conclusion is that through implementation of the mitigation measures, no significant negative impacts will result from the location, design, construction, or operation. The environmental management plan has properly been implemented. |
Involuntary Resettlement | A short resettlement plan was prepared to guide the acquisition of land (the land-for-land option was chosen by all affected people who have already identified the land they wish to be awarded) and the compensation for the loss of crops. The resettlement plan was implemented accordingly. |
Indigenous Peoples | No indigenous people will be negatively impacted. |
Stakeholder Communication, Participation, and Consultation | |
During Project Design | All relevant stakeholders, including affected communities and affected people, were fully consulted during project preparation. Development of the Dagachhu hydropower component considered affected peoples' concerns and preferences during finalization of the design, particularly the alignment of access roads to minimize negative impacts, while maximizing benefits. They were consulted to define appropriate compensation rates and a course of actions including scheduling, and were requested to select cash compensation or the alternative land to be awarded as replacement for the land acquired by the Dagachhu facility. |
During Project Implementation | Public consultation with stakeholders continues throughout implementation of the Dagachhu hydropower component. |
Business Opportunities | |
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Consulting Services | Not required. |
Procurement | 1. Engineering and Civil works for the Dagachhu hydropower component through ICB in accordance with the ADB's Procurement Guidelines (2007, as amended from time to time). 2. Procurement of materials for rural electrification following ICB. All construction works and material transportation are to be outsources through national competitive bidding. |
Responsible ADB Officer | Kaoru Ogino |
Responsible ADB Department | South Asia Department |
Responsible ADB Division | Energy Division, SARD |
Executing Agencies |
Druk Green Power Corporation Limited |
Timetable | |
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Concept Clearance | 31 Oct 2007 |
Fact Finding | 05 May 2008 to 23 May 2008 |
MRM | 01 Jul 2008 |
Approval | 29 Oct 2008 |
Last Review Mission | - |
PDS Creation Date | 26 Sep 2008 |
Last PDS Update | 08 Mar 2018 |
Grant 0119-BHU
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
29 Oct 2008 | 13 Feb 2009 | 21 Apr 2009 | 31 Dec 2013 | 28 Feb 2014 | 28 Feb 2015 |
Financing Plan | Grant Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 25.28 | Cumulative Contract Awards | |||
ADB | 25.28 | 17 Jun 2022 | 24.01 | 0.00 | 95% |
Counterpart | 0.00 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 17 Jun 2022 | 24.01 | 0.00 | 95% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | Unsatisfactory | Satisfactory | Satisfactory | - | Satisfactory |
Grant 0141-BHU
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
26 Dec 2008 | 13 Feb 2009 | 21 Apr 2009 | 31 Dec 2013 | - | 02 Apr 2014 |
Financing Plan | Grant Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 1.00 | Cumulative Contract Awards | |||
ADB | 0.00 | 17 Jun 2022 | 0.00 | 0.92 | 92% |
Counterpart | 0.00 | Cumulative Disbursements | |||
Cofinancing | 1.00 | 17 Jun 2022 | 0.00 | 0.92 | 92% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | Unsatisfactory | Satisfactory | Satisfactory | - | Satisfactory |
Loan 2463-BHU
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
29 Oct 2008 | 13 Feb 2009 | 04 May 2009 | 31 Dec 2013 | - | 02 Apr 2014 |
Financing Plan | Loan Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 96.00 | Cumulative Contract Awards | |||
ADB | 51.00 | 17 Jun 2022 | 51.00 | 0.00 | 100% |
Counterpart | 45.00 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 17 Jun 2022 | 51.00 | 0.00 | 100% |
Loan 2464-BHU
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
29 Oct 2008 | 13 Feb 2009 | 04 May 2009 | 31 Dec 2013 | - | 02 Apr 2014 |
Financing Plan | Loan Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 29.00 | Cumulative Contract Awards | |||
ADB | 29.00 | 17 Jun 2022 | 29.41 | 0.00 | 100% |
Counterpart | 0.00 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 17 Jun 2022 | 29.41 | 0.00 | 100% |
Loan 3034-BHU
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
30 Sep 2013 | 02 Oct 2013 | 09 Oct 2013 | 31 Dec 2014 | 30 Jun 2015 | 28 Jul 2015 |
Financing Plan | Loan Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 39.02 | Cumulative Contract Awards | |||
ADB | 39.00 | 17 Jun 2022 | 35.11 | 0.00 | 100% |
Counterpart | 0.02 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 17 Jun 2022 | 35.11 | 0.00 | 100% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | Unsatisfactory | Satisfactory | Satisfactory | - | Satisfactory |
TA 7157-BHU
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
29 Oct 2008 | 20 Nov 2008 | 20 Nov 2008 | 31 Dec 2010 | 30 Dec 2011 | 31 Dec 2012 |
Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
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ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
Gov | Beneficiaries | Project Sponsor | Others | |||||
1,488,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,488,000.00 | 17 Jun 2022 | 1,463,516.87 |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | Unsatisfactory | Satisfactory | Satisfactory | - | Satisfactory |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
Evaluation Documents See also: Independent Evaluation
Title | Document Type | Document Date |
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Bhutan: Green Power Development Project | Validations of Project Completion Reports | Dec 2018 |
Related Publications
Title | Document Type | Document Date |
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Green Power for Bhutan: Clean Energy Crosses Borders to Reach Poor Households | Brochures and Flyers | Jun 2014 |
Together We Deliver: 10 Stories from ADB-Supported Projects with Clear Development Impacts | Books | Apr 2014 |
Bhutan: Green Power Development Project | Papers and Briefs | May 2011 |
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
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Tenders
Contracts Awarded
Procurement Plan
Title | Document Type | Document Date |
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Green Power Development Project - Additional Financing: Procurement Plan | Procurement Plans | Sep 2013 |
Bhutan Green Power Development Project | Procurement Plans | Oct 2008 |
Green Power Development Project | Procurement Plans | Oct 2008 |