Indian Prime Minister Narendra Modi and Bhutan’s King Jigme Khesar Namgyel Wangchuck jointly inaugurated the 1,020 MW Punatsangchhu-II Hydroelectric Project yesterday, marking a major addition to Bhutan’s power generation capacity and a milestone in India–Bhutan energy cooperation.
The run-of-the-river project is located on the Punatsangchhu River in Wangdue Phodrang district, Bhutan. It is the fourth major hydropower plant built with Indian financial and technical assistance, following Chukha, Kurichhu, and Mangdechhu projects.
According to Bhutanese officials, the completion of Punatsangchhu-II will increase the country’s total installed hydropower capacity by about 40 per cent. The electricity generated will supply Bhutan’s domestic demand and enable exports of surplus power to India under existing bilateral agreements.
Prime Minister Modi described the project as a “symbol of mutual trust and cooperation” between India and Bhutan. Both leaders said the project reinforces the two countries’ shared goal of clean energy development and regional energy integration.
During the visit, India also announced an additional line of credit of approximately USD 450 million (around ₹4,000 crore) to support future hydropower and infrastructure projects in Bhutan. The initiative is expected to facilitate continued collaboration on projects such as the 1,200 MW Punatsangchhu-I scheme, which remains under development.
The Punatsangchhu-II project was developed with Indian funding and technical support under the inter-governmental model that governs hydropower cooperation between the two countries. Electricity from Bhutan’s hydropower projects is transmitted to India under long-term purchase agreements managed by both governments.
Officials said the plant is designed as a run-of-the-river facility, which limits environmental impacts compared to large reservoir-based projects. The project’s commissioning adds to the growing portfolio of hydropower assets that are central to Bhutan’s economy and India’s renewable energy supply.
India currently imports over 1,500 MW of electricity from Bhutan’s hydropower stations. The successful operation of Punatsangchhu-II is expected to further strengthen this energy exchange and contribute to both nations’ low-carbon development goals.
