ADB Approves $160 Million Loan for 310 MW Solar Expansion in Bhutan

The Asian Development Bank ( ADB ) has approved a $160 million loan to support the expansion of solar power generation in Bhutan , financing the development of at least 310 MW of new photovoltaic capacity across three utility-scale solar projects. The projects will be located in the Bumthang and Lhuentse districts and are expected to diversify Bhutan's renewable energy mix while strengthening electricity supply during the country's dry winter months, when hydropower output declines. DGPC and Tata Power Renewable Energy to Develop Projects Bhutan's state-owned Druk Green Power Corporation (DGPC) will independently develop two of the planned solar farms in Bumthang district. These include the 120 MW Wobthang Solar Farm and the 40 MW Pedseling Solar Farm, with DGPC responsible for both project development and equity investment. The third project, the 150 MW Dramthang Solar Farm in Lhuentse district, will be developed through a joint venture between DGPC and Tata Power Renewable Energy Limited ( TPREL ). To integrate the projects into the national electricity network, Bhutan Power Corporation will construct approximately 46 kilometres of transmission lines connecting all three solar farms to the grid. First Private-Majority Energy PPP for Bhutan According to ADB, the initiative will establish Bhutan's first private-majority public-private partnership (PPP) in the energy sector, marking a significant milestone in attracting private investment into the country's renewable energy industry. The additional solar capacity is expected to reduce Bhutan's dependence on imported electricity during winter, when lower river flows limit hydropower generation. ADB noted that the country's peak winter electricity demand increased from 487 MW in 2021 to 1,477 MW in 2025, while the winter power deficit is projected to exceed 1,000 MW by 2030 if additional capacity is not added. The project also supports Bhutan's long-term objective of installing 5,000 MW of solar capacity by 2040. Training and Policy Support Included Beyond infrastructure development, the programme includes capacity-building initiatives aimed at strengthening Bhutan's renewable energy workforce. More than 250 people are expected to receive renewable energy training, with at least 70% of participants targeted to be women. ADB will also provide a $1 million technical assistance grant to help strengthen Bhutan's solar energy policies, regulatory framework and institutional capabilities. Financing Package Blends Public and Private Capital The financing package combines multilateral lending, grants and private investment. Alongside the $160 million loan, the project will receive a $500,000 grant from the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), funded by the Government of Japan, to support training and scholarship programmes. ADB estimates the initiative will mobilise approximately $68.7 million in private equity and commercial financing, creating a blended financing model designed to encourage greater private-sector participation in Bhutan's clean energy transition.