The European Investment Bank (EIB) has signed a €150 million (US$159 million) loan to support the development of solar PV and hydropower plants in Bhutan.
The loan – the first investment support the EIB has signed with Bhutan – will stand for 30 years and support Bhutan’s Nationally Determined Contribution target. Bhutan is one of three net carbon-negative nations on earth, aided by the forests that cover around 71% of its land mass and store large volumes of carbon emissions.
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The EIB said the money would support “an estimated 310MW of new renewable energy generation to serve communities in remote regions”, expected to generate around 670GWh of power annually. The new solar capacity will help to account for shortages in hydropower generation during Bhutan’s dry season.
Lyonpo Lekey Dorji, finance minister of the Kingdom of Bhutan, said: “As Bhutan strives to maintain its carbon-negative status amidst rising global challenges, this partnership not only strengthens Bhutan’s renewable energy sector, but also contributes to the broader regional and global effort in combating climate change.”
Bhutan began construction on its first utility-scale solar PV project in July 2023. The 17.38MW site is being constructed by Bhutanese construction firm M/S Rigsar and Indian engineering company PES and is expected to be completed by the end of 2024. Upon completion, responsibility for the plant’s operation will pass to the Bhutanese electricity utility Druk Green Power Corporation.
Druk Green Power will also implement the new projects supported by the EIB loan.