India to collaborate with Bhutan in the energy sector



The Bhutan-India Energy Partnership is a significant collaboration between the two countries aimed at harnessing Bhutan’s abundant hydropower resources for mutual benefit.

To this effect, a Memorandum of Understanding (MoU) on cooperation in the field of energy efficiency and energy conservation measures was signed between the Royal Government of Bhutan (RGoB) and the Government of India (GoI) on 22 March in Thimphu.

The MoU was signed between the Bureau of Energy Efficiency, Ministry of Power, GoI, and the Department of Energy under the Ministry of Energy and Natural Resources.

The exchange of MoU signing was witnessed by the Indian PM Narendra Modi, who was on a two-day state visit to Bhutan, and the Prime Minister Tshering Tobgay.

According to the joint statement, the two leaders noted the stellar contribution of the clean energy partnership in the development of the hydro-power sector of Bhutan, and in providing energy security to the region.

Indian Prime Minister Narendra Modi lauded the growing domestic capacity of Bhutanese firms and technical agencies in the implementation of energy projects.

Similarly, PM Tshering Tobgay congratulated Prime Minister Narendra Modi for the remarkable growth of India’s renewable energy sector in recent years, and for his leadership in fostering initiatives such as the International Solar Alliance and National Green Hydrogen Mission of India. 

Both Prime Ministers reviewed all aspects of bilateral energy cooperation and expressed satisfaction that projects, which have been jointly implemented, are functioning well and contributing to economic development in Bhutan.

The statement said, building on the success of the 720 MW Mangdechhu Hydro-electric Project (HEP), the two leaders look forward to commissioning the 1,020 MW Punatsangchhu-II HEP this year. Both sides welcomed the positive expert-level discussions on a technically sound and cost–effective way forward for 1,200 MW Punatsangchhu-I HEP.

Meanwhile, both Prime Ministers agreed that the Bhutan-India energy partnership has the potential to benefit both countries by enhancing energy security, strengthening their economies, generating employment, enhancing export earnings, and contributing to the further development of industrial and financial capacities.

It is agreed that there are unprecedented opportunities to further strengthen this mutually beneficial bilateral clean energy partnership, including through the development of new energy projects and trade in electricity, and to engage in the development of new energy projects in the fields of hydropower, solar and green hydrogen.

The two Prime ministers also agreed that both Governments will review and finalize project-specific implementation modalities for new projects, including reservoir hydro projects. The GoI will facilitate necessary access to financing from financial institutions in India as well as the market for power sale for new and upcoming hydro-power projects in Bhutan.

The joint statement said that the power exchange between the two countries would continue to play an important role in ensuring energy security in the region. In this regard, market access to Bhutanese power producers will be facilitated by applicable domestic regulations and procedures, through mutually agreed arrangements and delivery points.

Given the evolving energy markets, the two Prime Ministers also agreed to hold regular consultations for enabling investments in energy projects of Bhutan, and for ensuring seamless cross-border trade in electricity.

Similarly, the parties also agreed to work towards greater sub-regional energy cooperation, which would lead to increased inter-linkages between the economies for the mutual benefit of all stakeholders. They plan to strengthen energy cooperation in the field of energy efficiency and energy conservation through capacity development, information exchange on policies and technologies, and research and development on energy-efficient technologies.

Meanwhile, the two countries share an exemplary bilateral relationship characterized by trust, goodwill, and mutual understanding at all levels, strong bonds of friendship, and close people-to-people contacts.

The two Prime Ministers had fruitful and wide-ranging discussions in Thimphu wherein the two leaders reaffirmed their commitment to taking this extraordinary bilateral partnership to new heights, looking into the future.

Both Prime Ministers agreed to expedite the movement on projects and other initiatives for mutual benefit. 

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