Japan’s Strategic Investment in Bhutan’s Hydropower Sector

Japan is offering 13.7 billion yen in loans for hydropower projects in Bhutan, solidifying relations between the two countries. The initiative includes three hydropower plants set for construction commencing in May and completing by 2029. This project aims to stabilize Bhutan’s energy supply and assist in economic development, emphasizing sustainable practices.

Japan is set to offer approximately 13.7 billion yen (around $90 million) in loans to support a hydropower plant initiative in Bhutan. This effort is part of a broader strategy to strengthen relations with Bhutan, which is geographically positioned between India and China. The loan agreement was formalized in February by Japanese Ambassador to Bhutan, Keiichi Ono, and Bhutanese Ambassador Vetsop Namgyel in New Delhi, as reported by the Foreign Ministry.

The project entails the construction of three hydropower stations, including one situated in Samdrup Jongkhar and two in Samtse, both of which are adjacent to India. Construction is slated to commence in May, with an expected completion date in 2029, according to the Japan International Cooperation Agency, which operates under government oversight.

Bhutan significantly benefits from hydroelectric power generation, particularly by selling surplus energy to India during the rainy season, which spans approximately from June to October. This sector constitutes roughly 40% of Bhutan’s annual export value, showcasing the country’s reliance on hydroelectricity and its challenges during the dry season as energy demands continue to escalate alongside economic growth.

One of the planned facilities will function as a “storage hydropower” plant, utilizing a dam to create a water reservoir that enables the control of electricity generation timing. This advancement addresses energy demand during dry periods, according to a Japanese ministry official, thereby facilitating a more consistent power supply.

Japan’s assistance aims to bolster Bhutan’s energy stability and enhance power exports, contributing to both the nation’s economic progress and the decarbonization of the Southwest Asian region. This project marks the inaugural hydraulic plant endeavor backed by Japan, underlining Bhutan’s economic reliance on India and the absence of diplomatic ties with China.

Furthermore, Japan views Bhutan as geopolitically significant, maintaining a cordial relationship with the Himalayan kingdom, which has a population nearing 800,000 and is recognized for prioritizing the Gross National Happiness index.

In conclusion, Japan’s commitment to invest 13.7 billion yen into Bhutan’s hydropower sector underscores the strengthening diplomatic relations between the two nations. This hydropower initiative not only supports Bhutan’s economic stability and energy demands but also aligns with Japan’s broader goals of promoting sustainability in the region. As Bhutan embarks on this significant project, it hopes to enhance its power export capabilities while securing a consistent energy supply.

Original Source: english.kyodonews.net