en.Wedoany.com Reported - The Asian Development Bank (ADB) has approved a $160 million loan to support Bhutan in adding at least 310 megawatts (MW) of solar power capacity.
The funds will be used for the Solar Farm Expansion Project, involving three utility-scale solar projects and associated transmission infrastructure, aimed at reducing Bhutan's reliance on hydropower during the dry winter months. State-owned Druk Green Power Corporation (DGPC) will build the 120 MW Wobthang and 40 MW Pedseling solar farms in Bumthang. The 150 MW Dramthang project in Lhuntse is expected to be delivered through a joint venture between DGPC and India's Tata Power Renewable Energy Limited, marking Bhutan's first private-sector-led public-private partnership (PPP) in the energy sector. Bhutan Power Corporation will also construct 46 kilometers of transmission lines to connect these projects to the national grid.
The ADB stated that the new solar capacity from this project will help diversify Bhutan's power mix. Currently, the country relies almost entirely on hydropower, but seasonal declines in river flow during winter are increasingly forcing Bhutan to import electricity as demand rises. ADB data shows that the country's winter peak demand has grown from 487 MW in 2021 to 1,477 MW in 2025, and is projected to exceed available supply by over 1 gigawatt (GW) by 2030.
Sonomi Tanaka, ADB Country Director for Bhutan, described the project as a turning point for Bhutan's energy security. By expanding solar alongside hydropower, Bhutan can reduce costly electricity imports, attract private investment through the first private-sector-led PPP in the energy sector, and create green jobs for women and youth, thereby building a more resilient and inclusive long-term economy.
The project supports Bhutan's National Energy Policy target of deploying 5 GW of solar capacity by 2040. In addition to infrastructure construction, the initiative includes a workforce training program for over 250 beneficiaries, with at least 70% of participants expected to be women. The ADB's Technical Assistance Special Fund will also provide a $1 million technical assistance grant to support policy formulation and institutional capacity building, aimed at encouraging future private investment in Bhutan's solar sector. The multilateral lender expects the project to mobilize an additional $68.7 million in private equity and commercial debt.
