Japan Extends Financial Support to Bhutan for Hydropower Development

Japan is providing approximately 13.7 billion yen ($90 million) in loans to Bhutan for a hydropower project, enhancing bilateral relations. The project will include three power stations, which are vital for Bhutan’s energy exports and economic development, particularly during the rainy season. This initiative underscores Japan’s commitment to supporting Bhutan’s energy security and decarbonization efforts.

Japan is set to extend loans amounting to approximately 13.7 billion yen (around $90 million) for a hydropower project in Bhutan, aimed at strengthening relations with the nation located between India and China. The loan agreement was finalized in February in New Delhi by Japanese Ambassador to Bhutan Keiichi Ono and Bhutanese Ambassador Vetsop Namgyel, as confirmed by the Japanese Foreign Ministry.

Construction of three hydropower stations is slated to commence in May in the districts of Samdrup Jongkhar and Samtse, with projected completion by 2029, according to the Japan International Cooperation Agency. Bhutan’s energy strategy includes selling surplus hydroelectric power to India during the monsoon season, which constitutes about 40 percent of its annual export revenue.

Bhutan relies predominantly on hydroelectricity but encounters challenges in meeting energy demands during dry seasons, which are projected to grow alongside economic expansion. One of the new facilities will be a storage hydropower plant, capable of regulating electricity generation through water storage in a dam.

The Japanese government aims to assist Bhutan in achieving a stable energy supply while facilitating power exports during the rainy season. This initiative is seen as a contribution to Bhutan’s economic advancement and its efforts towards decarbonization in Southwest Asia.

This project marks Japan’s inaugural support for a hydropower initiative in Bhutan, a nation with strong economic ties to India and no formal relations with China. Japan recognizes Bhutan’s significance due to its population of nearly 800,000 and its commitment to the Gross National Happiness index, thus persisting in maintaining a cordial mutual relationship.

Japan’s provision of loans to Bhutan signifies a strategic partnership aimed at enhancing energy stability and economic growth in the Himalayan nation. With a focus on hydropower projects, Japan seeks to bolster Bhutan’s export capabilities while promoting sustainable energy practices. This marks a pivotal step in showcasing Bhutan’s potential in the regional energy market.

Original Source: english.kyodonews.net