Prime Minister Narendra Modi is expected to inaugurate the 720 megawatts (MW) Mangdechhu hydropower project in Bhutan during his visit on 17-18 August, underlining the National Democratic Alliance (NDA) government’s “neighbourhood first" policy, as well as India’s special relationship with the strategically located Himalayan nation.
As part of India’s economic diplomacy—including efforts to exert strategic influence in its neighbourhood with infrastructure development— India is helping Bhutan build 10,000MW of hydropower with concessional finance, with the overall investment expected to be about $10 billion.
State-run NHPC Ltd, India’s largest hydropower firm, was the design and engineering consultant for the strategically important Mangdechhu project, which was commissioned on 15 July.
The run-of-the river project is located on the Mangdechhu in Trongsa Dzongkhag district in central Bhutan. The bilateral agreement to build the project was signed between India and Bhutan on 30 April 2010.
This will be Modi’s first trip to Bhutan since the China-India military face-off in 2017, triggered by an intrusion by Chinese troops into territory claimed by Bhutan.
“The Mangdechhu project has been completed and is likely to be inaugurated by the honourable prime minister. It has been done in very good time and is of good quality," said Balraj Joshi, chairman and managing director of NHPC.
India’s power and new and renewable energy minister Raj Kumar Singh on Thursday said hydropower projects have the ability to improve the per capita income in areas where they come up. Singh cited the example of Bhutan, wherein a substantive part of electricity generated is bought by India. According to the Indian embassy in Thimphu, hydropower exports provide more than 40% of Bhutan’s domestic revenues, and constitute 25% of its gross domestic product (GDP).
Bhutan, strategically located between India and China, has the potential to generate 30,000MW of hydropower, but has a capacity of just 1,490MW.
Apart from hydropower projects, India has also helped Bhutan build the Penden cement plant, Paro airport and the Bhutan Broadcasting Service Station.
In recent years, China has also been trying to woo Bhutan, seeking to open an embassy in the country, which has diplomatic missions from only three countries—India, Bangladesh and Kuwait.