The Asian Development Bank (ADB) has approved a $160 million loan to help Bhutan significantly expand its solar power capacity, strengthen energy security, and attract private investment through the country’s first private-majority public-private partnership (PPP) in the energy sector.
The Solar Farm Expansion Project will add at least 310 MW of new solar generation capacity through three utility-scale solar farms. Two projects—Wobthang (120 MW) and Pedseling (40 MW)—will be developed by Druk Green Power Corporation (DGPC), while the 150 MW Dramthang Solar Farm will be implemented through a joint venture between DGPC and Tata Power Renewable Energy Limited. The project also includes the construction of 46 kilometers of transmission lines to connect the plants to Bhutan’s national grid.
ADB Country Director for Bhutan Sonomi Tanaka said the project marks “a turning point for Bhutan’s energy security,” noting that expanding solar generation alongside hydropower will reduce costly electricity imports, mobilize private investment, and create green jobs, particularly for women and youth.
Bhutan currently depends almost entirely on hydropower, making electricity supply vulnerable during the dry winter months when river flows decline. The country’s peak winter electricity demand has risen sharply from 487 MW in 2021 to 1,477 MW in 2025, with the supply deficit expected to exceed 1,000 MW by 2030.
In addition to the ADB loan, the project will receive a $500,000 grant from the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), funded by Japan, to support renewable energy skills development. A further $1 million technical assistance grant will strengthen institutional capacity for solar development and help attract future private investment. The project is also expected to mobilize approximately $68.7 million in private sector financing.
The initiative supports Bhutan’s national target of installing 5,000 MW of solar capacity by 2040, while promoting a more diversified, resilient, and sustainable energy sector.
