Bhutan-based KHPL signs Rs 4,829 crore loan agreement with PFC

New Delhi: Bhutan-based Kholongchhu Hydro Power Ltd has signed a term loan agreement worth Rs 4,829 crore with state-owned Power Finance Corporation (PFC).

Khorlochhu Hydro Power Ltd (KHPL), a strategic partnership with 60 per cent shareholding by Druk Green Power Corporation Ltd (DGPC) and 40 per cent by Tata Power Company Ltd, is developing the 600 megawatt (MW) Khorlochhu Hydropower Project in Bhutan. The project, with an estimated cost of approximately Rs 6,900 crore, including financing charges, is expected to be commissioned in 2029-2030.

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According to DGPC, KHPL signed the Rs 4,829 crore loan agreement with India's NBFC Power Finance Corporation Ltd (PFC) on Sunday. The agreement also provides for a further standby credit facility of Rs 950 crore.

This landmark transaction marks PFC's first cross-border financing in Bhutan and highlights the growing clean energy cooperation between India and Bhutan.

Under the agreement, PFC will be the sole lender to the project.

The Khorlochhu Hydropower Project in Trashiyangtse Dzongkhag is expected to generate 2,524 million units of electricity annually. The project will help meet Bhutan’s winter demand and enable the export of surplus power to India during the summer months.

Construction has already commenced, with civil contracts awarded and works underway since January 1, 2025. Power evacuation will involve a 145 km, 400 kV (kilovolt) double-circuit transmission line from the project to the Goling pooling station, which will be constructed by Bhutan Power Corporation Ltd.

Druk Green Power Corporation Ltd, a subsidiary of Druk Holding and Investments Ltd, is Bhutan’s sole generation utility with a portfolio of 3,473 MW of hydropower capacity. With a vision to achieve 15,000 MW of hydropower and 5,000 MW of solar capacity within the next decade, DGPC is central to Bhutan’s clean energy strategy.

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