India-Bhutan Punatsangchhu-II Hydropower Project
The 1020 MW Punatsangchhu-II Hydroelectric Project in Bhutan has been successfully completed with the synchronisation of its final unit to the national power grid in 2025. This milestone marks advancement in India-Bhutan bilateral cooperation in clean energy. The project enhances Bhutan’s installed power capacity by about 40 per cent and strengthens regional energy security.
Recent Developments
The final unit (Unit 6, 170 MW) of the Punatsangchhu-II project was synchronised in August 2025. Earlier, five units had already been commissioned between December 2024 and July 2025. The project has injected over 1.3 billion units of electricity into Bhutan’s grid, generating revenues of approximately Nu 4.9 billion. The physical progress of the project stands near completion at 99.19 per cent.
Project Overview
Punatsangchhu-II is a run-of-the-river hydroelectric power plant located on the Punatsangchhu River in Bhutan’s Wangdue Phodrang district. It has an installed capacity of 1020 MW. The project was sanctioned at a cost of ₹37,778 million and is fully funded by the Government of India, with 30 per cent as a grant and 70 per cent as a loan at 10 per cent interest annually.
India-Bhutan Hydropower Cooperation
India and Bhutan share a longstanding partnership in hydropower development. Together they have implemented five major projects – Chukha (336 MW), Kurichhu (60 MW), Tala (1020 MW), Mangdechhu (720 MW), and Punatsangchhu-II (1020 MW). These projects have helped Bhutan increase its power capacity to over 3500 MW, with surplus electricity exported to India.
Strategic and Environmental Significance
The project exemplifies clean energy cooperation between the two countries, supporting regional energy security and climate goals. As a run-of-the-river facility, it involves minimal displacement and environmental impact compared to large dam projects. This aligns with sustainable development and green energy priorities in South Asia.
Challenges and Delays
Construction began in December 2010 with an expected seven-year completion. However, geographical challenges, flash floods, the COVID-19 pandemic, and geological issues caused delays. The final commissioning was rescheduled to August 2025. Despite setbacks, expert Indian agencies like WAPCOS and NIRM ensured technical excellence.
Future Prospects
The India-Bhutan energy partnership continues to expand under the 2024 Joint Vision Document. Further projects like the 1200 MW Punatsangchhu-I are underway. This collaboration offers a model for cross-border clean energy development encouraging mutual prosperity and regional integration.
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