Bhutan’s 310-MW Solar Expansion Backed by ADB Loan

• ADB backs Bhutan with a $160M loan to build new solar parks—adding 310MW—plus transmission links, financing boosts, and private capital to help reach 5GW solar by 2040.

The Asian Development Bank approved a $160 million ordinary capital resources loan to help Bhutan expand solar generation by building new photovoltaic parks adding at least 310 MW. The financing is expected to cover most project costs, including DGPC’s equity contribution in a public-private partnership.

Three solar facilities will be constructed: 120-MW Wobthang and 40-MW Pedseling in Bumthang by Druk Green Power Corporation, and a 150-MW Dramthang plant in Lhuentse by a joint venture between DGPC and Tata Power Renewable Energy. Bhutan Power Corporation will build 46 km of transmission lines to connect the projects to the national grid. ADB expects additional $68.7 million in private equity and commercial debt to be mobilized, supporting Bhutan’s goal of reaching 5 GW of solar by 2040.

How will ADB’s $160M loan boost Bhutan’s solar expansion to 310 MW?

• The ADB $160 million ordinary capital resources loan provides long-term, low-cost funding that can reduce the overall financing burden for Bhutan’s next phase of utility-scale solar buildout toward 310 MW.
  
• By covering a large share of project expenditures, the loan helps unlock faster procurement and construction timelines for new photovoltaic (PV) parks.
• The financing structure is designed to support Bhutan’s public-private partnership approach, including the equity contribution from Druk Green Power Corporation (DGPC), which can make it easier for private developers to participate at scale.
  
• Three new solar facilities will expand generating capacity across different regions, bringing the total incremental output to at least 310 MW:
  - 120 MW Wobthang (Bumthang) – DGPC
  - 40 MW Pedseling (Bumthang) – DGPC
  - 150 MW Dramthang (Lhuentse) – DGPC and Tata Power Renewable Energy joint venture
• Strengthening grid access is a central part of the boost: Bhutan Power Corporation will construct about 46 km of transmission lines to integrate the new plants into the national grid, reducing the risk of generation curtailment.
  
• The loan is expected to catalyze additional financing beyond the ADB amount, with ADB projecting about $68.7 million mobilized through private equity and commercial debt—helping scale the investment envelope for solar expansion.
  
• The additional capacity supports Bhutan’s longer-term renewable development pathway by contributing directly to the country’s stated ambition to reach 5 GW of solar capacity by 2040.
  
• Accelerating solar additions also diversifies Bhutan’s generation mix, complementing hydropower with more distributed seasonal and daily energy supply options.
• The project design supports building market confidence for future solar PPPs by demonstrating bankable utility-scale project delivery and grid interconnection planning.