ADB backs Bhutan's 310-MW solar expansion with $160m loan

Three solar farms to be built in Bumthang and Lhuentse.

The Asian Development Bank (ADB) has approved a $160m loan to finance the expansion of solar power generation in Bhutan, supporting the development of at least 310 megawatts (MW) of new solar capacity.

The solar farm expansion project will develop three solar farms across the country.

Druk Green Power Corporation (DGPC) will build the 120 MW Wobthang and 40 MW Pedseling solar farms in Bumthang, whilst the 150 MW Dramthang solar farm in Lhuentse will be developed through a joint venture between DGPC and Tata Power Renewable Energy Limited.

Additionally, Bhutan Power Corporation will construct 46 kilometers of transmission lines to connect the facilities to the national grid.

ADB said the project will introduce Bhutan's first private-majority public–private partnership (PPP) in the energy sector and help reduce the country's reliance on imported electricity during the dry winter season, when hydropower generation declines.

Bhutan's peak winter electricity demand increased from 487 MW in 2021 to 1,477 MW in 2025. The country's winter power deficit is projected to exceed 1,000 MW by 2030.

The project supports Bhutan's target of developing 5,000 MW of solar power capacity by 2040.

It also includes renewable energy training programs for more than 250 people, with at least 70% of beneficiaries expected to be women.

The ADB loan will finance most of the project's costs, including DGPC's equity investment in the joint venture.

A $500,000 grant from the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), funded by the Government of Japan, will support training and scholarship programs, whilst a separate $1m ADB technical assistance grant will help strengthen Bhutan's solar energy policies and institutional capacity.

ADB said the project is also expected to mobilise about $68.7m in private equity and commercial debt.