Both sides have acknowledged the mutual benefits of collaboration in the hydropower sector
On December 27, 2022, the Mangdechhu Hydroelectric Project Authority (MHPA) transferred control of the 720 MW Mangdechhu Hydroelectric Project to Druk Green Power Corporation (DGPC), Bhutan. Speaking at the event, Ambassador Sudhakar Dalela called the project a "benchmark project" that was finished in an ideal amount of time and money. He also discussed the importance the Indian government places on moving the India-Bhutan renewable energy cooperation ahead. It may be recalled that in August 2019, Bhutan's Prime Minister Lotay Tshering and India's PM Narendra Modi jointly launched the 720 MW Mangdechhu Hydroelectric Project. Due to the project, Bhutan's electrical power generation capacity has grown by 44% to 2,326 MegaWatts, and it has produced almost 9,500 million units of energy since it was put into service. Additionally, the commissioning of the Mangdechhu Hydropower Project caused a 31% rise in hydropower earnings for Bhutan in 2020, at a time when the Covid-19 pandemic caused a decline in income for important economic sectors. The project received the esteemed Brunel Medal in 2020 from the London-based Institute of Civil Engineers in honor of its superior civil engineering work as well as its social and environmental credentials. The initiative will cut greenhouse gas emissions by around 2.4 million tons each year. Jaldhaka Agreement 1961: The starting point of India-Bhutan hydropower cooperation This is not the first time India has put effort into increasing hydropower cooperation with Bhutan. Nearly all areas of collaboration, especially the significant hydroelectric power production, have benefited from the unique bilateral relationship between India and Bhutan. Since Bhutan's First Five Year Plan was established in the early 1960s, India has generously contributed to the completion of power project agreements, starting with the Jaldhaka Agreement in 1961. However, the 336 MW Chukha Hydropower Project's inauguration in 1987 was a watershed moment in Indo-Bhutan hydrology relations. It was the first megapower project in Bhutan, entirely sponsored by the Government of India with a 60% grant and a 40% loan, with a 5% interest rate due over a 15-year period following commissioning. Due to the success of this project, others with similar confidence, economic viability, and advantages have been given the green light. Later, India funded one of the largest cooperative projects between India and Bhutan, the 1,020 MW Tala Hydroelectric Project, with a 60% grant and 40% loan. In addition, the two nations have signed a number of agreements outlining their cooperation in the hydropower sector, including the Cooperation in the Field of Hydroelectric Power (HEP) in July 2006 and the Protocol to the 2006 Agreement concerning Cooperation in the Field of Hydroelectric Power in May 2008. Fresh impetus to India-Bhutan hydropower cooperation Following the election of Narendra Modi as India's Prime Minister in 2014, hydropower cooperation between India and Bhutan found fresh impetus. The 600 MW Kholongchu hydroelectric project, a joint venture between SJVNL from India and Druk Green Power Corporation from Bhutan, had its foundation stone placed during PM Modi's 2014 visit to Bhutan. Later, leaders of both countries jointly launched the 720 MW Mangdechhu hydropower project in August 2019. Apart from them, Bhutan is also working on two sizable hydroelectric power projects. By 2024 or 2025, it is anticipated that the 1200 MW Punatsangchu I will be completed, and by 2022, the 1020 MW Punatsangchu II will be put into service. Hydropower is a significant part of the Bhutanese economy since the country is blessed with an abundance of water. That’s why both Bhutan and India have acknowledged the prospects and mutual benefits of their collaboration in the hydropower industry. By assisting Bhutan, India can alleviate their power shortage, while Bhutan can increase its national revenue through the sale of power to India, particularly during the peak demand season. As a result of this mutually beneficial situation, the relationship between the two countries becomes even more solid and long-lasting.