Brief on the Punatsangchhu-I Project (as on April 11, 2026)

Work on Bhutan’s Largest HEP funded by India, Re-Commences after 7 years

5 Dariya News

Bhutan 11-Apr-2026

• The Punatsangchhu-I Hydroelectric Project (PHEP-I) is a run-of-the-river scheme on the Punatsangchhu River in Wangduephodrang Dzongkhag in western Bhutan. PHEP-I has an installed capacity of 1200 MW and will generate an average of 5670 million units of electricity each year.

• PHEP-I is the largest ongoing project in Bhutan. Once completed, it will increase Bhutan’s hydropower capacity by about 30% to almost 4700 MW and generate an average of 5,670 million units of electricity annually.

• The Government of India is funding the project. The funding involves 40% grant and 60% loan.

• The surplus power generated by the PHEP-I will be sold to India at a mutually determined price, to be agreed at the time of project commissioning.

• Construction commenced on 11th November 2008, with an initial commissioning schedule of November 2015.

• However, during execution, the project faced significant geological challenges in surface and underground works, leading to numerous design changes. The Dam works were adversely affected by the destabilisation of the right bank slope at the dam since 2013, leading to the suspension of ongoing dam works since 2019.

• The two governments and the agencies involved deliberated on the issues during several meetings and through studies. On 31st July 2025 the two governments agreed to resume dam construction and stabilising the right-bank slope.

• After almost seven years, on 10th April 2026 the work on the 1,200-megawatt Punatsangchhu-I Hydroelectric Project in Wangdue Phodrang has resumed with the commencement of the dam construction. The Minister of Power, Housing and Urban Affairs, Shri Manohar Lal and Bhutan’s Minister of Energy and Natural Resources, Gem Tshering, attended the concrete pouring ceremony on the 10th April 2026 – marking a significant milestone for this massive project. The main dam construction work was halted since 2019 due to major geological challenges.

• The project is expected to be commissioned within the next five years upon completion of dam construction and right-bank slope stabilisation works.

• Physical and Financial progress (as on 28th February 2026):

➢ Cost (Dec. 2013 PL) approved by CCEA: Rs. 9375.57 crore

➢ Financial Progress: Rs. 8785.19 Crore (93.70%), Physical Progress: 87.75%

Revised Cost Estimate (RCE) under examination with CEA and CWC.