India has extended a concessional line of credit worth ₹4,000 crore to Bhutan to support the development of new hydropower and energy-sector projects, further deepening the decades-long partnership between the two countries in clean and sustainable energy.

The announcement coincided with the inauguration of the 1,020 MW Punatsangchhu-II Hydroelectric Project,  a major milestone in bilateral cooperation that underscores the shared commitment to renewable energy and regional growth. The project, developed with Indian assistance, marks another chapter in the strong energy collaboration that has helped Bhutan emerge as a key exporter of hydroelectric power to India.

Also Read: Tata Power Commits ₹60 Crore to Bhutan Hydropower Project

According to officials, the extended credit line will help finance additional hydropower projects, strengthen power transmission infrastructure, and encourage renewable energy diversification, including solar and wind energy integration in Bhutan’s power mix. It also aims to enhance cross-border energy trade, improving grid stability and ensuring a steady supply of clean electricity to India.

Bhutanese authorities lauded the initiative, noting that it will play a vital role in boosting the country’s energy self-reliance while contributing to its economic development goals. The partnership not only supports Bhutan’s hydropower expansion but also aligns with India’s broader efforts to promote sustainable energy transitions across South Asia through regional cooperation, technology exchange, and green financing mechanisms.

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