Hydropower - 6,000 MW by 2020
If Bhutan were to generate 6,000 MW by 2020 it would require adding, every year, a Chukha project to generate 346 MW of power, for the next 12 years, according to the draft 10th Plan document. The projections, the draft document states, are realistically based and anchored by the Indo-Bhutan agreement on the long term cooperation in the field of hydropower development signed in July 2006. Under the umbrella agreement, that is valid for 60 years, India will import a minimum of 5,000 MW of power from Bhutan by 2020. Considering domestic consumption, Bhutan will be required to develop hydropower capacity of around 6,000 MW, which means an additional capacity of 4,500 MW. It already has a generation of 1,489 MW in 2007 with the commissioning of the Tala project. To reach these generation targets, several hydropower projects have been planned for implementation in the 10th and 11th Five Year Plans (see table). According to the draft document, the Detailed Project Report (DPR) of Punatshangchhu I has been completed and pre construction activities have already started. The agreement to prepare the DPR for Punatshangchu II and the DPR for Mangdechu was signed in September 2006. Both DPR will take two years to be completed. The pre construction activities for construction of the 114 MW Dagachu project has also begun and is in the process of exploring various options to finalise the final financing structure, which could be by raising capital within the country and soft loans from Austria and the Asian Development Bank. The government of India has indicated financing 40 percent of Punatshangchhu I as grant and 60 percent as loan. The construction of Punatshangchhu II and Madechhu projects is expected through joint ventures in which nominated agencies of the two governments could form JV companies to develop these projects with a debt equity of 70:30. The energy sector is therefore poised to continue leading and boosting growth in the future economic scenario and raising living standards and reducing poverty levels. The draft document estimates an investment of Nu 500.00 billion over the next 20 years to accelerate hydropower development through 15 mega projects. These projects are outside the Five Year plan outlays. Hydropower projects for construction in the Tenth and Eleventh Plan periods