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ADB Approves USD 160 Million Loan for 310 MW Solar Projects in Bhutan

The Asian Development Bank has approved a USD 160 million loan to support the deployment of at least 310 MW of new solar capacity across three projects in Bhutan.

July 08, 2026. By Mrinmoy Dey

The Asian Development Bank (ADB) has approved a USD 160 million ordinary capital resources loan to scale up solar power generation in Bhutan. The project will deploy at least 310 MW of new solar generation capacity and attract private investment through the country's first private-majority public–private partnership (PPP) in the energy sector.

The Solar Farm Expansion Project will develop three solar farm subprojects. The Wobthang (120 MW) and Pedseling (40 MW) solar power farms in Bumthang will be constructed by Druk Green Power Corporation (DGPC), while the Dramthang (150 MW) solar farm in Lhuentse is expected to be developed through a joint venture between DGPC and Tata Power Renewable Energy. Bhutan Power Corporation will build 46 kilometres of transmission infrastructure to connect the solar farms to the national grid, stated ADB.

Commenting on the development, Sonomi Tanaka, ADB Country Director for Bhutan, said, “This project is a turning point for Bhutan's energy security. By scaling up solar energy alongside hydropower, Bhutan can cut costly electricity imports, attract private investment through its first private-majority PPP in the energy sector, and create green jobs for women and youth – building a more resilient and inclusive economy for the long term.”

Bhutan’s power supply relies almost entirely on hydropower. During the dry winter months, river flow drops, causing power generation to decline and forcing the country to import electricity. Peak winter demand has nearly tripled – from 487 MW in 2021 to 1,477 MW in 2025 – and the deficit is projected to exceed 1,000 MW by 2030.

The project will help address this growing gap by diversifying the country's energy mix and supporting the Government of Bhutan’s national energy policy target of harnessing 5,000 MW of solar power by 2040. It will also establish renewable energy skills development programs targeting more than 250 beneficiaries – at least 70 percent of them women – and create jobs for local communities around the project sites.

The ADB loan will finance most expenditures, including DGPC's equity investment in the PPP joint venture. A USD 500,000 grant from the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), financed by the Government of Japan, will fund the training and scholarship programs needed for green job creation. A separate USD 1 million technical assistance grant from ADB’s Technical Assistance Special Fund will strengthen institutional capacity for solar development, including policy guidelines to attract further private investment. The project is expected to additionally catalyse approximately USD 68.7 million in private equity and commercial debt, stated ADB.

Tags:

Solar PV

Asian Development Bank

ADB Loan

Solar projects in Bhutan

Solar expansion in Bhutan

Druk Green Power Corporation

Tata Power Renewable Energy

Sonomi Tanaka