Druk Green Power Corporation Limited (DGPC) has awarded the main civil and hydro-mechanical works contract for the 500 kW Lunana Mini Hydropower Project, marking a key step in Bhutan’s first high-altitude hydropower development.
On January 7, 2026, DGPC awarded Package I: Civil and Hydro-Mechanical Works to Chhimi RD Construction Private Limited for approximately BTN 390m. Bidding is under way for Package II: Electro-Mechanical Works, with construction expected to begin in April 2026.
The Lunana project, located at around 4200m above sea level, is part of Bhutan’s 13th Five Year Plan. It is the country’s first hydropower scheme to be built at such elevation. Due to severe winter conditions, site works will be limited to a short construction season, extending the overall schedule to more than 24 months.
Project financing is being provided by the Government of India under its Project Tied Assistance framework, through a Nu. 1.50 bn (about US$18m) allocation covering small hydropower, solar and wind projects. DGPC prepared the detailed project report and has been entrusted by the Royal Government of Bhutan to implement generation works, while Bhutan Power Corporation will deliver the transmission and local distribution network.
Once commissioned, the plant will supply grid electricity to the remote highland communities of Lunana in northern Bhutan, where households currently rely mainly on solar home lighting systems and firewood. The project is expected to benefit about 699 people across 13 villages, comprising 197 households. DGPC has also proposed using surplus generation during off-peak periods for a hot water distribution system.
Lunana has no road access, with supplies typically transported by foot, horses or yaks over journeys of up to six days; helicopter services are also used. Project construction will therefore rely heavily on air transport for personnel, equipment and materials.
DGPC said the project will improve energy access in one of Bhutan’s most remote regions while contributing to rural development and reducing reliance on traditional biomass fuels.
