India and Bhutan Welcome ₹4,000 Crore Energy Credit

India and Bhutan welcomed a concessional Line of Credit of ₹4,000 crore, also described as Nu 40 billion, for energy projects in Bhutan. The agreement was signed between the Export-Import Bank of India and Bhutan’s Ministry of Finance on 1 August 2026 and was reviewed during External Affairs Minister S. Jaishankar’s official visit to Bhutan from 16 to 18 September 2026.

India-Bhutan Development Cooperation

The credit facility forms part of bilateral development cooperation between India and Bhutan. The Fifth India–Bhutan Development Cooperation Talks were held in Thimphu, and Indian Foreign Secretary Vikram Misri took part in the review of ongoing projects.

Energy Projects and Financing

The Line of Credit is intended for hydropower projects, power transmission infrastructure, and renewable energy diversification in Bhutan. The financing framework also covers solar and wind energy integration into Bhutan’s power mix.

Bhutan’s Hydropower Sector

Bhutan’s energy sector has a strong hydropower base, and India has supported several hydroelectric projects in the country. The 1,020 MW Punatsangchhu-II Hydroelectric Project was inaugurated in November 2025 and was linked with the earlier announcement of the credit line.

Development Plan Context

This ₹4,000-crore credit line is separate from India’s ₹10,000-crore support package for Bhutan’s 13th Five-Year Plan. Bhutan’s 13th Five-Year Plan covers the period from 2024 to 2029.

Important Facts for Exams

• The Export-Import Bank of India is India’s official export credit agency and provides lines of credit for overseas projects.
• Bhutan is a Himalayan kingdom and a landlocked country in South Asia.
• Hydropower is a major component of Bhutan’s electricity generation and export earnings.
• The Punatsangchhu-II Hydroelectric Project has an installed capacity of 1,020 MW.

India and Bhutan have a long-standing development partnership in hydropower, roads, and connectivity projects. The 13th Five-Year Plan of Bhutan runs from 2024 to 2029.