India Extends Nu 40 Billion Line of Credit to Bhutan for Energy Projects; Work on Punatsangchhu-I to Resume

🇧🇹 India Extends Nu 40 Billion Line of Credit to Bhutan for Energy Projects; Work on Punatsangchhu-I to Resume Thimphu, November 11, 2025 — In a major boost to Bhutan’s energy sector, India has announced a Nu 40 billion (₹4,000 crore) line of credit to support hydropower and renewable energy projects across the country. The announcement came during Indian Prime Minister Narendra Modi’s official visit to Bhutan, where he and Bhutanese Prime Minister Dasho Tshering Tobgay reaffirmed their commitment to deepening bilateral cooperation in clean energy and economic partnership. According to India’s Ministry of External Affairs, the new concessional financing facility will be directed toward “energy cooperation initiatives,” including hydropower generation, grid modernization, and renewable integration. Officials also confirmed that work will soon resume on the long-delayed 1,200 MW Punatsangchhu-I Hydroelectric Project, a key venture that had faced technical and geological challenges for more than a decade. Speaking in Thimphu, Prime Minister Modi said India remains committed to supporting Bhutan’s vision of energy self-reliance and regional sustainability. “Bhutan’s progress is India’s progress. Our partnership in hydropower reflects shared prosperity and mutual trust,” he said. The two leaders also inaugurated the 1,020 MW Punatsangchhu-II Hydroelectric Project, symbolizing the continued success of India–Bhutan collaboration in the power sector. The LoC announcement, valued at roughly US $450 million, is expected to accelerate Bhutan’s hydropower expansion while creating new employment and export opportunities. This latest initiative further strengthens the decades-long hydropower partnership between the two Himalayan neighbors, through which Bhutan exports surplus electricity to India — a cornerstone of both nations’ clean-energy transition.