India and Bhutan have formed their first-ever joint venture to develop a hydropower project.

The 600 MW project will be located on the Kholongchhu river in Trashiyangtse district of eastern Bhutan. The project will be developed by Kholongchhu Hydroelectric Limited, a joint venture formed between Druk Green Power Corporation of Bhutan and Satluj Jal Vidyut Nigam Limited of India. The project is expected to be completed in the second half of 2025.

The Kholongchhu Hydro Energy Limited has also signed a concession agreement with the government of Bhutan for the development of the project. The project will consist of an underground powerhouse of four 150 MW turbines, which will be impounded with water from a concrete gravity dam with a height of 95 meters.

The hydropower sector is the primary area of cooperation between the two countries. So far, India has funded four hydropower projects in Bhutan, which include 36 MW Chukha hydropower project, 60 MW Kurichhu hydropower project, 1,020 MW Tala hydropower project, and 720 MW Mangdechu hydropower project totaling about 2.1 GW of hydroelectric power.

Meanwhile, the International Hydropower Association recently released its 2020 Hydropower Status Report, which notes that India overtook Japan as the fifth largest hydropower generator in the world with an installed capacity of 50.07 GW. The IHA’s report also showed that globally, hydropower generated 4,306 TW of power in 2019, the highest contribution from any renewable energy source recorded in history. The report also noted that the largest hydro project commissioned in 2019 was the 720 MW Mangdechu Project in Bhutan, funded by the Indian government to power the country’s market and to export any surplus power to India.

In March 2019, India decided to include large hydropower projects over 25 MW under the portfolio of renewable energy. This move by the government added 43 GW of existing hydropower projects to the renewables basket.

According to Mercom India Research, as of March 31, 2020, large hydropower projects of 45.7 GW are operational in the country, accounting for 12.3% of the total installed power capacity in India.