Japan to extend $90M loan to build hydropower plant in Bhutan

By Berk Kutay Gokmen

ISTANBUL (AA) - Japan will extend $90 million in loans for the construction of a hydropower plant in Bhutan, in an effort to strengthen relations with the landlocked country located between India and China, the Tokyo-based Kyodo news agency reported on Thursday.

Japan’s Foreign Ministry said that the loan agreement was signed in New Delhi in February, between Japanese Ambassador to Bhutan Keiichi Ono and his Bhutanese counterpart Vetsop Namgyel.

According to the Japan International Cooperation Agency, the construction of three hydropower stations in Bhutan’s Samdrup Jongkhar and Samtse districts bordering India is set to begin in May and is expected to be finished by 2029.

Selling surplus hydro-energy to India is one of Bhutan's key industries, making up about 40% of its annual export value, according to Japan’s Foreign Ministry.

The ministry noted that the small Himalayan kingdom relies almost entirely on hydroelectricity and struggles to secure enough power during the dry season.

The ministry stated that by assisting Bhutan in achieving a stable energy supply and boosting power exports during the wet season, Japan aims to "contribute to the country's economic and social development and decarbonization of the Southwest Asian region."