EIB Grants €150 Million for Renewable Energy Projects in Bhutan to Boost Green Power and Maintain Carbon Neutrality

The European Investment Bank (EIB), recognized as the largest multilateral bank worldwide and a top financier of renewable energy projects, has finalized its inaugural investment in Bhutan. This strategic partnership involves a €150 million loan aimed at enhancing renewable energy production and maintaining Bhutan’s commitment to carbon neutrality.

In a significant move to support climate action, the EIB loan will facilitate the construction of small to mid-sized run-of-river hydropower plants and solar photovoltaic systems across Bhutan. These initiatives are expected to diversify the nation’s energy sources and promote regional energy trading. The project targets providing sustainable energy to thousands of households, thus supporting Bhutan’s goal to optimize its renewable energy assets.

This deal, part of the EU’s Global Gateway initiative, was signed at the 2024 IMF/World Bank Spring Meetings by Bhutan’s Finance Secretary Leki Wangmo and EIB Global’s acting Managing Director Markus Berndt, in the presence of EIB President Nadia Calviño.

President Calviño highlighted the project’s broader benefits, including improving access to essential services like health and education through reliable and affordable green energy. Lyonpo Lekey Dorji, Bhutan’s Finance Minister, emphasized the importance of this partnership in bolstering Bhutan’s renewable sector and its role in global climate change mitigation efforts.

The funded projects, which will be implemented by Druk Green Power Corporation, are expected to generate approximately 310 MW from hydropower and solar sources. This addition will notably boost Bhutan’s energy security by producing about 670 GWh in the first year alone, thereby reducing the need for energy imports, particularly during the dry season.

This strategic investment underscores Bhutan’s position as an environmental leader, maintaining its status as one of the world’s few net carbon-negative countries. The initiative also aims to fortify the nation’s resilience against the seasonal variability impacting hydropower.