Khorlochhu Hydro Power Ltd ( KHPL ) has signed a term loan agreement worth 48.29 billion rupees ( US$544 million ) with state-owned Power Finance Corporation ( PFC ) to support the development of a 600-megawatt hydroelectric project in Bhutan.

KHPL is 60% owned by Druk Green Power Corporation ( DGPC ) and 40% by Tata Power Company, one of India's largest integrated power companies. The project, with an estimated capex plus financing charges of 69 billion rupees, is expected to be commissioned in 2029-2030.

PFC, a development finance institution under the administrative control of the Ministry of Power, will be the sole lender to the project.

The agreement also provides for a further standby credit facility.

This is PFC's first cross-border financing in Bhutan and highlights the growing clean energy cooperation between India and Bhutan.

The Khorlochhu Hydropower Project in Trashiyangtse Dzongkhag will help meet Bhutan's winter demand and enable the export of surplus power to India during the summer months.

Construction has already begun, with civil contracts awarded and works underway since January. There will be a 145-kilometre, 400-kilovolt double-circuit transmission line from the project to the Goling pooling station, which will be constructed by Bhutan Power Corporation.

DGPC, a subsidiary of Druk Holding and Investments Ltd, is Bhutan's sole generation utility, with a portfolio of 3,473MW of hydropower capacity.

With a vision to achieve 15,000MW of hydropower and 5,000MW of solar capacity within the next decade, DGPC is central to Bhutan's clean energy strategy.