Nepal, Bhutan seek financial support from India to boost hydropower exports

New Delhi: Nepal and Bhutan are actively seeking Indian investments to enhance their hydroelectric output and increase power exports to India, according to officials from both countries who spoke at an industry event on Tuesday.

With India striving to achieve net-zero emissions by 2070, the country is looking for renewable energy sources to power its growing economy. Currently, Nepal and Bhutan export 2,070 megawatts (MW) and 700 MW of electricity, respectively, to India.

According to reports, both Himalayan nations are aiming to increase their power generation capacity in the coming years. Bhutan plans to reach an annual capacity of 25 gigawatts (GW) by 2040, with 20 GW coming from hydropower and 5 GW from solar energy. Similarly, Nepal is targeting a generation capacity of 28 GW within the next 10-12 years, the officials said.

To achieve these ambitious targets, both countries are seeking financial support from Indian banks and access to India’s energy market. Chhewang Rinzin, managing director of Bhutan’s state-run Druk Green Power Corporation, emphasized the importance of Indian financing, noting that private Indian firms like Tata Power, Adani Group, and Reliance Power have already signed agreements to develop hydroelectric projects in Bhutan. While Bhutan currently allows up to 49 percent  private investment in its hydropower projects, Rinzin indicated that the country may consider increasing this limit to meet its 2040 goal.

In Nepal, which currently produces around 3,000 MW of power—95 percent of which is hydroelectric—the government is also welcoming Indian private investment. Kul Man Ghising Tamang, managing director of Nepal Electricity Authority, stated that Nepal’s hydropower sector is open to all private companies with no restrictions on investment. Several Indian companies, including the Adani Group, are already involved in various stages of project development in the country.

The growing collaboration between India and its Himalayan neighbors in the energy sector could play a crucial role in meeting both India’s renewable energy needs and boosting the economies of Nepal and Bhutan through power exports.