Bhutan : Second Green Power Development Project
ADB and the Government of Bhutan are working together to export clean energy while supporting social services and providing electricity to the poor. The Second Green Power Development Project is building a run-of-the-river hydropower plant in central Bhutan through a partnership with several private companies. Clean power generated by the plant will be sold to India and will help reduce carbon emissions. The clean energy from Bhutan will allow India to eliminate around 460,000 tons of carbon dioxide emissions every year that it would otherwise have generated through fossil fuels. The revenue generated from exporting power to India will be used to finance social services in Bhutan such as health, education and rural development. The planned 118-megawatt plant will be located on the Nikachhu River in a narrow valley in the central Trongsa District.
Project Details
-
Project Officer
Horiguchi, Kazuhiro
Sectors Group
Request for information -
Country/Economy
Bhutan -
Modality
-
Sector
- Energy
Related Projects
- Project Name
- Second Green Power Development Project
- Project Number
- 44444-013
- Country / Economy
- Bhutan
- Project Status
- Active
- Project Type / Modality of Assistance
- Grant
- Loan
- Technical Assistance
- Source of Funding / Amount
-
Grant 0421-BHU: Green Power Development Project II Source Amount Asian Development Fund US$ 25.25 million Loan 3225-BHU: Second Green Power Development Project Source Amount Ordinary capital resources US$ 70.00 million Loan 3226-BHU: Second Green Power Development Project Source Amount Asian Development Fund US$ 25.25 million TA 8791-BHU: Acceleration of Hydropower Trading Development Source Amount Technical Assistance Special Fund US$ 1.00 million Loan: Second Green Power Development Project Source Amount State Bank of India US$ 41.66 million Export-Import Bank of India US$ 17.16 million - Strategic Agendas
- Environmentally sustainable growth
- Inclusive economic growth
- Regional integration
- Drivers of Change
- Gender Equity and Mainstreaming
- Governance and capacity development
- Knowledge solutions
- Partnerships
- Private sector development
- Sector / Subsector
Energy / Large hydropower generation
- Gender
- Some gender elements
- Description
ADB and the Government of Bhutan are working together to export clean energy while supporting social services and providing electricity to the poor. The Second Green Power Development Project is building a run-of-the-river hydropower plant in central Bhutan through a partnership with several private companies. Clean power generated by the plant will be sold to India and will help reduce carbon emissions. The clean energy from Bhutan will allow India to eliminate around 460,000 tons of carbon dioxide emissions every year that it would otherwise have generated through fossil fuels. The revenue generated from exporting power to India will be used to finance social services in Bhutan such as health, education and rural development. The planned 118-megawatt plant will be located on the Nikachhu River in a narrow valley in the central Trongsa District. As a run-of-the-river plant, it does not need a large reservoir for water storage, but comprehensive safeguard management plans are provisioned for the project implementation.
- Project Rationale and Linkage to Country/Regional Strategy
- Bhutan is the only South Asian country with a surplus of power for export. About 75% of the power it generates is exported to India, which contributes to one-fifth of the Bhutan's gross domestic product and accounts for one-third of government revenue. The money generated from power exports to India is the primary source for government spending on social services such as health, education, and rural development. Hydropower is the principal source of energy in Bhutan and as a result it is the foundation of the economy and social services system in the country. As Bhutan's expansion of hydropower has increased in recent years, the quality of life and social services have improved. Continued hydropower development is critical to sustaining government revenue, social services investment and keeping electricity prices low.
- Impact
Expanded cross-border power trading
Project Outcome
- Description of Outcome
Increased clean hydropower generation in Bhutan
- Progress Toward Outcome
- Ongoing.
Implementation Progress
- Description of Project Outputs
1. Hydropower plant constructed
2. DGPC and THyE project management and implementation capacity enhanced
3. Hydropower development and trading framework improved
- Status of Implementation Progress (Outputs, Activities, and Issues)
Construction nearing completion. Overall progress is 99%
On 13 April 2022, the loan/grant closing date has been extended until 30 June 2024 to enable completion of the remaining project activities and fully utilize the loan/grant amount.
The construction works were initially delayed as the rock quality at the headrace tunnel site was worse than the predicted geological baseline. However, the geological problems continued and substantially slowed down work progress. Civil and hydro-mechanical contractors also had serious difficulties in mobilizing both skilled and unskilled workforce from their home countries to the project site due to coronavirus disease (COVID-19) pandemic. Thus, critical time was almost lost, but workforce has been mobilized gradually by recruiting Bhutanese workers, and work productivity has been recovered to an operational level.
To mitigate delays, THyE has been taking various remedial measures to support the civil contractor in mobilizing additional equipment and workforce to each phase of the works, providing experts' advice frequently, conducting micro-level planning and close monitoring activities, through high-level management meetings between THyE and DGPC and the contractors. The majority of work is now likely to be done by December 2022 while the pressure shaft activities are spilled over by April 2023, and the electro-mechanical works complete with 95% by December 2022. The transmission linkage is almost available.
All the works are highly likely to be completed by 31 December 2023, which indicates 24 months behind the envisaged schedule.
Equity of THyE has been fully covered by DGPC without PPP.
Completed.
Weaving training was conducted successfully. The number of participants was 18, which is 72% of the target.
Study completed.
Review of Electricity Act conducted in line with the request from the Government, and a comprehensive report prepared.
- Geographical Location
Safeguard Categories
- Environment
- A
- Involuntary Resettlement
- B
- Indigenous Peoples
- C
Summary of Environmental and Social Aspects
- Environmental Aspects
- Provided in draft environmental impact assessments disclosed.
- Involuntary Resettlement
- Provided in a draft resettlement plan disclosed.
- Indigenous Peoples
- Not applicable.
Stakeholder Communication, Participation, and Consultation
- During Project Design
- A series of consultations with affected persons and communities have been conducted by the project implementing agency for project preparation, and they will be continued.
- During Project Implementation
- A series of consultations with affected persons and communities will be continued throughout project implementation.
Business Opportunities
- Consulting Services
- The consultants financed by ADB for the attached TA will be recruited according to ADB's Guidelines on the Use of Consultants. An estimated 40 person-months (25 international, 15 national) of consulting services are required to strengthen the power sector's key frameworks and systems to enhance Bhutan's hydropower development and trading by using ADB TA. Consulting firms will be engaged using the quality and cost based selection (QCBS) method.
- Procurement
- Procurement is expected to be in accordance with ADB Procurement Guidelines.
Contact
- Responsible ADB Officer
- Horiguchi, Kazuhiro
- Responsible ADB Department
- Sectors Group
- Responsible ADB Division
- Energy Sector Office (SG-ENE)
- Executing Agencies
-
Department of Hydropower & Power Systems, Ministry of Economic Affairs
Druk Green Power Corporation Limited
Tangsibji Hydro Energy Limited
Timetable
- Concept Clearance
- 10 Oct 2011
- Fact Finding
- 08 Jul 2014 to 25 Jul 2014
- MRM
- 01 Oct 2014
- Approval
- 15 Dec 2014
- Last Review Mission
- -
- Last PDS Update
- 16 Sep 2022
Funding
Grant 0421-BHU
| Approval | Signing Date | Effectivity Date | Closing | ||
|---|---|---|---|---|---|
| Original | Revised | Actual | |||
| 15 Dec 2014 | 04 May 2015 | 26 Jun 2015 | 30 Jun 2020 | 30 Jun 2024 | - |
| Total (Amount in US$ million) | |
|---|---|
| Project Cost | 44.11 |
| ADB | 25.25 |
| Counterpart | 18.86 |
| Cofinancing | 0.00 |
| Date | ADB | Others | Net Percentage | |
|---|---|---|---|---|
| Cumulative Contract Awards | 22 Jul 2024 | 25.29 | 0.00 | 100% |
| Cumulative Disbursements | 22 Jul 2024 | 25.01 | 0.00 | 99% |
| Category | Sector | Safeguards | Social | Financial | Economic | Others |
|---|---|---|---|---|---|---|
| Rating | Satisfactory | Satisfactory | Satisfactory | Satisfactory | - | Satisfactory |
Loan 3225-BHU
| Approval | Signing Date | Effectivity Date | Closing | ||
|---|---|---|---|---|---|
| Original | Revised | Actual | |||
| 15 Dec 2014 | 04 May 2015 | 26 Jun 2015 | 30 Jun 2020 | 30 Jun 2024 | - |
| Total (Amount in US$ million) | |
|---|---|
| Project Cost | 70.00 |
| ADB | 70.00 |
| Counterpart | 0.00 |
| Cofinancing | 0.00 |
| Date | ADB | Others | Net Percentage | |
|---|---|---|---|---|
| Cumulative Contract Awards | 22 Jul 2024 | 64.49 | 0.00 | 92% |
| Cumulative Disbursements | 22 Jul 2024 | 70.00 | 0.00 | 100% |
Loan 3226-BHU
| Approval | Signing Date | Effectivity Date | Closing | ||
|---|---|---|---|---|---|
| Original | Revised | Actual | |||
| 15 Dec 2014 | 04 May 2015 | 26 Jun 2015 | 30 Jun 2020 | 30 Jun 2024 | - |
| Total (Amount in US$ million) | |
|---|---|
| Project Cost | 25.25 |
| ADB | 25.25 |
| Counterpart | 0.00 |
| Cofinancing | 0.00 |
| Date | ADB | Others | Net Percentage | |
|---|---|---|---|---|
| Cumulative Contract Awards | 22 Jul 2024 | 23.35 | 0.00 | 99% |
| Cumulative Disbursements | 22 Jul 2024 | 23.35 | 0.00 | 99% |
TA 8791-BHU
| Approval | Signing Date | Effectivity Date | Closing | ||
|---|---|---|---|---|---|
| Original | Revised | Actual | |||
| 15 Dec 2014 | 07 Jan 2015 | 07 Jan 2015 | 31 May 2017 | 31 May 2018 | 24 Jul 2018 |
| ADB | Cofinancing | Counterpart | Total | |||
|---|---|---|---|---|---|---|
| Gov | Beneficiaries | Project Sponsor | Others | |||
| 1,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,000,000.00 |
| Date | Amount |
|---|---|
| 22 Jul 2024 | 973,266.70 |
| Category | Sector | Safeguards | Social | Financial | Economic | Others |
|---|---|---|---|---|---|---|
| Rating | Satisfactory | Satisfactory | 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
None currently available.
Related Publications
None currently available.
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.
ADB to Finance Second Hydropower Plant PPP in Bhutan
ADB will provide $120.5 million in a mix of loans and grants to build a run-of-the-river hydropower plant in central Bhutan though a public-private partnership.
Tenders
Contracts Awarded
| Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
|---|---|---|---|---|---|---|
| Capacity Development | Technical Assistance 8791 | 17 Sep 2015 | PriceWaterhouseCoopers Pvt. Ltd. (India) in association with Phuensum Consulting Services (Bhutan) | 8-2-624/A/1, 4th Floor, Hyderabad, Andhra Pradesh 500 034, India | Druk Green Power Corporation | 906,208.00 | — |
Procurement Plan
None currently available.