The Dagachhu Hydropower Project is a run-of-river type with an installed capacity of 126 MW (MW) and approximate mean annual energy production of 515 GWh. The project is located in the south-western part of Bhutan under Dagana Dzongkhag (district), located between 10.5 km and 20.2 km upstream of the confluence with the Punatsangchhu. The elevation of the project area and the catchment area ranges from 500 m to almost 4,000 m above mean sea level. The electricity generated is delivered to Indian grid thereby increasing the share of renewable energy in the region.
The project is the first hydropower project in the Kingdom financed through a public-private partnership with participation from Bhutanese and international stakeholders. Bhutan’s state-owned utility, Druk Green Power Corporation Limited holds 59% equity, India’s leading energy company, Tata Power Company holds 26% and the National Pension and Provident Fund of Bhutan holds 15% equity.
The Asian Development Bank, Raiffeisen Zentralbank Österreich AG (RZB) of Austria and the National Pension & Provident Fund of Bhutan are co-financers of the project.
The project was registered as a CDM project on February 26, 2010. The project is estimated to generate 515GWh of electricity annually that will provide 500,000 certified emission reduction (CER) certificates for trading with a crediting period from 2014 to 2021 (renewable). This is the first cross-border CDM project.
Contribution of the project activity to sustainable development
Since most of the project structures are underground, there is not much social and environmental impact. All affected families have been compensated in line with government regulations. The project has contributed to the socio-economic development of the local community and sustainable development of the country. The local communities have benefited from financial, employment and work opportunities.