Asian bank grants US$1.6 million for Bhutan hydro development

The Asian Development Bank (ADB) has granted US$1.6 million in technical assistance to the Bhutan Ministry of Energy for a Bhutan Power Development project that includes preparation of the 114-MW Dagachhu hydroelectric project and other hydro development.

The program is intended to strengthen Bhutan’s hydropower sector and accelerate hydropower development. (HNN 11/15/06) It also is to extend electricity to remote rural households, enhance regionwide energy efficiency, and advance cross-border economic cooperation.

Bhutan has hydropower potential of 30,000 MW, of which about 5 percent is being used. However, most people in the country do not have access to electricity. The government intends to achieve 85.6 percent electrification by 2013 and to develop 5,000 MW of hydro generation for export to India by 2020.

The technical assistance funding, announced February 2, is to prepare and strengthen comprehensive project design, feasibility assessment, financing plans, and implementation plans for three components:
o Rural electrification of 8,934 households;
o Interregional transmission links of 45 kilometers between Dhajay and Gelephu; and
o Development for power export Dagachhu, a demonstration run-of-river project with 19 kilometers of transmission to deliver power.

A financial package is to be devised through public-private partnerships in which an optimal financing/guaranteeing scheme will be sought from public and private investors and lenders.

ADB requested expressions of interest from consultants late last year. A total of 40 person-months of international consultants and 32 person-months of domestic consultants are to be required over 14 months. Work is expected to be carried out between March 2007 and May 2008.

The ADB project officer is Kaoru Ogino, Energy Division, SARD, Asian Development Bank, P.O. Box 789, 0980 Manila, Philippines; (63) 2-6326211; E-mail: kogino@adb.org; Internet: www.adb.org.

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