The Hindu Business Line : India steps up power play in Bhutan

New Delhi, May 17 With India looking to significantly ramp up its role in developing Bhutan’s hydropower potential, both countries are eyeing complementary gains in the future.

While for India, the prospect of increased hydropower imports (to the tune of around 5,000 MW) from Bhutan by 2020 offers a long-term and viable solution to plug the widening peaking shortages back home, the Himalayan nation could well be looking at double digit GDP growth through increased power exports to India in the foreseeable future.

Addressing a joint session of the Bhutanese Parliament on Saturday, the Prime Minister, Dr Manmohan Singh, who is on an official visit to Bhutan, said that India would develop two new mega hydropower projects — Punatsangchhu-II and Mangdechhu — there.

India would also commence preparation of DPRs (detailed project reports) for four new projects to achieve the target of importing at least 5,000 MW of electricity from Bhutan by 2020, he said.

India’s plans to scale up its involvement in harnessing Bhutan’s vast hydropower potential comes in the wake of the successful implementation of the jointly-implemented 1,020 MW Tata hydroelectric power project. The move also envisages greater play for Indian firms there.

Tala project

While for the Tala project, State-owned firms including Power Grid Corporation of India Ltd, PTC India Ltd and NHPC Ltd were involved, private sector players including the GMR Group and IL&FS, which recently bagged hydropower projects in Nepal, are expected to be in the running for contracts in the upcoming projects in Bhutan, according to industry players.

State-owned WAPCOS is already carrying out the detailed project report (DPR) work for Punatsangchhu-II.

The coming on-stream of Tala has already catapulted Bhutan into the double-digit GDP growth league. According to the Manila-based Asian Development Bank’s estimates, Bhutan’s GDP growth in financial year 2007 (ended 30 June 2007) is estimated to have doubled to 17 per cent, driven by the commissioning of the Tala project in July 2006.

Tala has effectively tripled Bhutan’s total power generation capacity to 1,480 MW, from the combined 460 MW of three older power stations, due to which total power exports shot up 77 per cent. Assuming that Tala’s full operation and the building of the new projects progresses on schedule, GDP growth should stay in double digits, at 14.4 per cent in fiscal FY2008, ADB estimates.

Of the new projects on the anvil, Mangdechu (670 MW) and Punatsangchhu II (990 MW) projects are slated to be built in 2009-2016. India is already involved in the building of the 1,095-MW Punatsangchhu project stage-I.

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