The Punatsangchhu-II Hydroelectric Project (PHPA-II) is a 1,020 MW run-of-the-river hydropower scheme on the Punatsangchhu river in Wangdue Phodrang dzongkhag, downstream of Punatsangchhu-I. Launched in 2010 and originally targeted for completion in 2018, its first units were synchronised in December 2024, with the final unit connected to the grid in August 2025.
The Punatsangchhu-II Hydropower Project (PHPA-II) is a 1,020 megawatt run-of-the-river hydroelectric scheme on the Punatsangchhu river in Wangdue Phodrang dzongkhag. It is located downstream of Punatsangchhu-I and was developed by the Punatsangchhu-II Hydroelectric Project Authority under an inter-governmental agreement between the Royal Government of Bhutan and the Government of India signed in 2010.[1]
Construction began in 2010 with an originally projected completion date of 2018. Like its upstream counterpart, the project experienced delays during construction, but on a less severe scale than PHPA-I. The first two of the project's six 170 MW units were synchronised with the grid in December 2024, and successive units came online over the following months. Unit 5 was synchronised in mid-2025 and the final unit was connected to the grid in August 2025, completing commissioning at full capacity.[2]
PHPA-II adds approximately 40 percent to Bhutan's previously installed hydropower capacity and is the second-largest power station in the country after the 1,020 MW Tala plant. Surplus power is sold to India under a long-term power purchase agreement, with the project operated by a successor entity within the Druk Green group.
Design and financing
PHPA-II is a run-of-the-river scheme. Water is diverted by a 91-metre-high concrete gravity dam, conveyed through a 14.6-kilometre headrace tunnel, and dropped to an underground powerhouse housing six Francis-turbine generating units rated at 170 MW each. Annual generation at design flow is projected at around 4,357 GWh.
The project is financed by the Government of India on terms of 30 percent grant and 70 percent loan, with the loan carrying 10 percent annual interest and repayable in 30 equated semi-annual instalments commencing one year after the mean date of commissioning. The total approved cost was Rs 37,778 million (approximately Nu 37.8 billion at the time of approval), although as with most Bhutanese hydropower projects this figure has been revised upward during construction.[3]
Construction
Civil works on the dam, headrace tunnel and powerhouse complex were carried out by Indian and joint Indo-Bhutanese contractors, with electromechanical equipment supplied principally by Bharat Heavy Electricals Limited (BHEL) of India. The project encountered geological challenges of its own, including issues with rock support in the headrace tunnel and water seepage, but did not suffer the kind of large slope failure that has affected PHPA-I.[4]
The Bhutanese Ministry of Energy and Natural Resources marked the start of testing and commissioning of Units 1 and 2 with a public announcement in late 2024, attended by senior officials from both governments. Subsequent unit commissioning was reported in regular bulletins from the Punatsangchhu-II Project Authority and the Consulate General of India in Phuentsholing.[5]
Power export and operating status
As with earlier joint projects, surplus electricity from PHPA-II is exported to India through the eastern regional grid under a long-term power purchase agreement. The Royal Government of Bhutan retains ownership of the plant, while operational management is transferred to Druk Green Power Corporation following commissioning.
Indian and Bhutanese statements at the time of full commissioning in August 2025 emphasised the contribution of the project to Bhutan's clean energy export earnings and to the integrated South Asian electricity market. The South Asia Subregional Economic Cooperation programme noted that with PHPA-II fully operational, Bhutan's installed hydropower capacity passed 3,500 MW.[6]
Comparison with PHPA-I
The two Punatsangchhu projects were originally conceived as a paired upstream-downstream development on the same river basin and were launched within two years of each other. Their subsequent histories have diverged sharply. PHPA-II reached commissioning roughly six to seven years behind its original schedule but with comparatively limited cost escalation; PHPA-I, by contrast, has been delayed by more than fifteen years and has seen costs more than double from initial estimates because of slope-stability problems on the right bank above the dam.
The contrast has been the subject of analytical commentary in Indian and Bhutanese media and in regional energy think-tanks, which have used the two projects to discuss site selection, geological due diligence and risk allocation in cross-border hydropower cooperation.[7]
References
- Overview of the Project — PHPA-II official website
- Synchronization of Unit 5 of 1020 MW Punatsangchhu-II — Consulate General of India, Phuentsholing
- Hydroelectric Projects — Embassy of India, Thimphu
- First two turbines operating at Punatsangchhu-II — Renewable Energy World
- Commencement of Testing and Commissioning of Unit 1 and 2 — Ministry of Energy and Natural Resources, Bhutan
- Fully Commissioned: Punatsangchhu-II Hydropower Project — SASEC
- 1,020 MW Punatsangchhu-II to enhance Bhutan's power generation capacity by 40 percent — Gulf News
See also
Punatsangchhu-I Hydropower Project
The Punatsangchhu-I Hydroelectric Project (PHPA-I) is a 1,200 MW run-of-the-river hydropower scheme under construction on the Punatsangchhu river in Wangdue Phodrang dzongkhag. Launched in 2008 with an original commissioning target of 2015, it has been severely delayed by recurrent slope instability on the right bank above the dam, with cost estimates rising from around Nu 35 billion to over Nu 90 billion.
society·5 min readKuri-Gongri Hydropower Project
The 2,640 MW Kuri-Gongri Hydropower Project is a planned reservoir-based hydropower scheme on the Kuri Chhu and Gongri Chhu in eastern Bhutan, currently in extended planning. Originally conceived in the 2008 India–Bhutan agreement to develop 10,000 MW by 2020, the project has been redesigned from run-of-river to reservoir, with the most recent Detailed Project Report estimating capital costs of approximately Nu 306–307 billion. As of mid-2025 no construction agreement has been signed.
society·5 min readChukha Hydropower Project
The Chukha Hydropower Project is a 336 MW run-of-the-river hydroelectric station on the Wangchhu river in Chukha dzongkhag, commissioned between 1986 and 1988. Financed and built by India under a 60 percent grant and 40 percent loan arrangement, it was Bhutan's first major hydropower facility and remains a foundational element of the kingdom's power export economy.
society·5 min readHydropower Debt Crisis in Bhutan
Bhutan's hydropower debt crisis refers to the accumulation of over $2.4 billion in external debt owed primarily to India for the financing of large hydropower projects. With hydropower-related debt accounting for the vast majority of Bhutan's external obligations and pushing the debt-to-GDP ratio above 100 percent, the crisis has raised fundamental questions about the sustainability of the country's hydropower-dependent development model.
society·7 min readPunatsangchhu Hydroelectric Project
The Punatsangchhu Hydroelectric Project comprises two large run-of-river hydropower plants on the Punatsangchhu (Sunkosh River) in Wangdue Phodrang District, Bhutan: Punatsangchhu-I (1,200 MW, still under construction) and Punatsangchhu-II (1,020 MW, fully commissioned August 2025 and inaugurated November 2025). Originally expected online by 2016-2017, both projects suffered severe delays and massive cost overruns. Punatsangchhu-II was commissioned in phases from December 2024 to August 2025, boosting Bhutan's power generation capacity by 40%, while Punatsangchhu-I remains stalled by geological challenges.
society·7 min readHistory of Hydropower Development in Bhutan
Hydropower is the backbone of Bhutan's modern economy and the defining feature of its relationship with India. From the 336 MW Chhukha project commissioned in 1986 to the full commissioning of Punatsangchhu-II in 2025, state-led run-of-river development has transformed state finances while concentrating external debt and export earnings in a single sector and a single buyer.
society·14 min read
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