Bhutan : Green Power Project Readiness Enhancement

Sovereign Project | 56335-001

The project readiness financing (PRF) is proposed to complete detailed engineering studies, environmental and social impact assessments, and bid document preparation for two hydropower projects: (i) the Bunakha hydropower project (180 megawatts [MW]) and (ii) the Nyera Amari hydropower project (404 MW). In 2019, these projects were included in Bhutan's power system master plan for 2040. The PRF's scope is also aligned with the ADB country partnership strategy for Bhutan.

Project Details

Project Name
Green Power Project Readiness Enhancement
Project Number
56335-001
Country / Economy
  • Bhutan
Project Status
Active
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan 6051-BHU: Project Readiness Financing (Energy)
Source Amount
Concessional ordinary capital resources lending US$ 5.00 million
Operational Priorities
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
  • OP6: Strengthening governance and institutional capacity
Sector / Subsector
  • Energy / Large hydropower generation

Gender
Description
The project readiness financing (PRF) is proposed to complete detailed engineering studies, environmental and social impact assessments, and bid document preparation for two hydropower projects: (i) the Bunakha hydropower project (180 megawatts [MW]) and (ii) the Nyera Amari hydropower project (404 MW). In 2019, these projects were included in Bhutan's power system master plan for 2040. The PRF's scope is also aligned with the ADB country partnership strategy for Bhutan.
Project Rationale and Linkage to Country/Regional Strategy
Bhutan has significant potential hydropower reserves estimated at 23,760 MW, of which only 9.8% has been tapped, resulting in an installed generation capacity of 2,334 MW. This electricity is utilized for domestic consumption while the surplus is exported to India. During the wet season, excess power is sold to India, and its revenue earning sustains the Bhutanese economy. Hydropower exports account for approximately 50% of total exports and contribute to 30-40% of the government's annual revenue. These revenues are the primary source for government spending on socioeconomic development for social services such as healthcare, education, and rural development. Thus, Bhutan has been incentivized to promote hydropower development as the key driver for inclusive economic growth. However, hydropower exports have experienced a decline since 2020 due to rising domestic electricity demand. Increased domestic consumption has led to a reduction in export and total revenues. The domestic demand growth will continue, primarily driven by industrial customers.
Impact

Project Outcome

Description of Outcome
Progress Toward Outcome

Implementation Progress

Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Nation-wide

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation

Business Opportunities

Consulting Services
Advance contracting. Advance contracting will be used for all consulting service packages, which comprise two separate packages for the Bunakha hydropower project and the Nyera Amari hydropower project. The various steps would include preparation of RFP and technical and financial evaluation of consulting firm for the overall review and update of the technical, environmental, and social aspects of the projects, followed by preparation of tender stage engineering and tender documents for the award of works (Civil, hydro-mechanical, and electromechanical, transmission) under a single performance-based contract of consulting services.
Procurement
All advance contracting and retroactive financing will follow the ADB Procurement Policy (2017, as amended from time to time) and the ADB Procurement Regulations (2017, as amended from time to time). The issuance of consulting service recruitment notices or invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. ADB has advised the DGPC that approval of advance contracting and retroactive financing does not commit ADB to finance the PRF project.

Contact

Responsible ADB Officer
Ogino, Kaoru
Responsible ADB Department
Sectors Group
Responsible ADB Division
Energy Sector Office (SG-ENE)
Executing Agencies
Druk Green Power Corporation Limited

Timetable

Concept Clearance
31 Jul 2023
Fact Finding
10 Sep 2023 to 15 Sep 2023
MRM
09 Oct 2023
Approval
28 Nov 2023
Last Review Mission
-
Last PDS Update
04 Dec 2023

Funding

Loan 6051-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2023 18 Dec 2023 14 Feb 2024 31 May 2026 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 5.15
ADB 5.00
Counterpart 0.15
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

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.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.


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.

None currently available.


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.

Tenders

Tender Title Type Status Posting Date Deadline
Nyera Amari Integrated HPP Firm - Consulting Closed
Bunakha Hydropower Project Firm - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.