Reliance Power Limited, one of India’s leading private sector power generation companies, has made a landmark move in clean energy collaboration by signing a commercial term sheet for a long-term Power Purchase Agreement PPA with Green Digital Private Limited GDL, a Bhutanese company owned by Druk Holding and Investments Limited DHI. DHI is the investment arm of the Royal Government of Bhutan. This move signifies a major stride in regional energy integration, especially in terms of cross-border infrastructure and clean energy investment in South Asia.

This collaboration is structured as a 50 50 joint venture between Reliance Power and DHI to develop Bhutan’s largest solar power project with a massive installed capacity of 500 megawatts MW. The project is poised to bring in a capital outlay of up to INR 2,000 crores, which represents the largest foreign direct investment FDI in Bhutan’s solar energy sector till date.

This partnership was formally initiated in October 2024, when Reliance Enterprises—a joint initiative by Reliance Power and Reliance Infrastructure—signed an agreement with DHI to collaborate on solar and hydropower projects in Bhutan. Along with the 500 MW solar project, this alliance also includes the Chamkharchhu I hydroelectric project, a 770 MW run of the river asset, which will be operated under a long-term concession model in line with Bhutan’s national energy development strategy.

The solar project will be developed using the Build Own Operate BOO model, which aligns with global practices in private sector energy investments. This structure will allow Reliance Power and DHI to maintain ownership and operational control while delivering long-term value through clean energy generation.

Reliance Power has already initiated Engineering Procurement and Construction EPC bids for the project. The tendering process is being carried out under international competitive bidding standards to ensure both cost efficiency and technical excellence. This is a significant move, considering the project's size and the complex terrain and logistics associated with building large-scale infrastructure in Bhutan.

In addition to the EPC phase, Reliance Power is also engaging with top financial institutions to structure sustainable long tenor project finance solutions. These financial strategies aim to optimize the capital structure, reduce overall cost of capital, and enhance the project’s long-term viability.

This initiative demonstrates Reliance Power’s strategic focus on clean energy assets, particularly those with high impact and long duration. The company’s current clean energy pipeline includes 2.5 GWp of solar power and over 2.5 GWhr of Battery Energy Storage Systems BESS, positioning it as India’s largest player in the integrated Solar plus BESS segment.

This Bhutan project is significant not just in size, but also in regional importance. It is aligned with Bhutan’s strategic sustainability framework and supports the broader energy transition goals across South Asia. The addition of solar power will help diversify Bhutan’s renewable energy portfolio, which until now has been heavily reliant on hydropower. This will also aid in improving the grid stability and resilience of Bhutan’s energy system.

The project is expected to be implemented in phased tranches over the next 24 months, enabling systematic development and integration into the grid. As each phase is completed, Bhutan will move closer to achieving its energy diversification goals, while also strengthening its economic ties with India.

For Reliance Power, this investment reaffirms its role as a pioneer in South Asian energy infrastructure. It reflects the group’s ambition to expand its renewable footprint across borders, and further solidifies its long-term commitment to India Bhutan bilateral relations in the power sector.

Reliance Power has been consistently ranked among the top-performing power producers in India. Its flagship project, the 3960 MW Sasan Power Limited, is the world's largest integrated coal-based power plant, and has been ranked as the best operating power plant in India for seven consecutive years. With this background, the company is well-positioned to lead one of the most ambitious solar projects in the Himalayan region.

This initiative is also expected to serve as a blueprint for future cross-border renewable energy collaborations in South Asia, especially as countries in the region ramp up efforts to meet their Paris Agreement goals and shift toward low-carbon economies.

Furthermore, the economic benefits for Bhutan are noteworthy. Besides attracting the largest-ever private FDI in its solar sector, the project will create jobs, build local expertise, and potentially boost technology transfer in the renewable energy field. These ripple effects are expected to have a long-lasting impact on Bhutan’s clean energy landscape.

As the project moves from agreements to on-ground implementation, all eyes will be on how efficiently the venture navigates technical environmental and financial challenges. Given Reliance Power’s strong track record and DHI’s local leadership, there is strong optimism about the project’s successful delivery.

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