ADB Approves $18 Million for Bhutan’s First Utility-Scale Solar Power Project

The 17.38 MW project will produce 25 GWh of power annually


Bhutan is set to get its first utility-scale solar photovoltaic (PV) power project, with the Asian Development Bank (ADB) approving financing of $18.26 million for its construction.

The project will have a capacity of 17.38 MW and will produce 25 GWh of power annually.

The project will help diversify Bhutan’s energy mix, which relies on hydropower making the sector vulnerable to variations in climate.

The Bhutan government will contribute $990,000 to the project. The financing from ADB also includes an $8.26 million concessional loan and an ADB-administered $10 million grant from the Asian Development Fund.

ADB Energy Specialist for South Asia Christoph Meindl explained, “This project will be Bhutan’s first major step toward diversifying power generation and increasing the resilience of its energy sector to future climate shocks. Increasing temperatures are projected to decrease glaciers and snow-covered areas, which will shift Bhutan’s hydrological system to a more rainfall-dominated pattern. This affects hydropower generation due to expected frequent droughts outside of the monsoon season and extreme high flows during the monsoon season.”

Technical assistance of $20,000 from ADB’s Technical Assistance Special Fund and $450,000 from the Republic of Korea e-Asia and Knowledge Partnership Fund will also support the project’s construction.

ADB said that the technical assistance would bolster learning opportunities on climate-resilient energy systems for higher secondary students in the science, technology, engineering, and mathematics disciplines.

The assistance will also encourage learning for the Department of Renewable Energy (DRE) under Bhutan’s Ministry of Economic Affairs. Women will constitute around 30%–40% of the beneficiaries of these learning programs. The DRE will conduct a gender equality and social inclusion mainstreaming self-assessment that will help the agency adopt an inclusive policy on a corporate level, like supporting gender-balanced staffing, proactive recruitment of persons with disabilities, and equality of pay.

Last year, ADB raised its climate financing targets for developing member nations to $100 billion from $80 billion until 2030.

In December 2020, the bank approved $231 million to develop the Lower Kopili Hydroelectric Power facility in Assam, India.