Signing Ceremony of the Exchange of Notes for Loan for Hydropower Plant Construction Project

On 17 February 2025, Ambassador of Bhutan to Japan, V. Namgyel, and Ambassador of Japan to Bhutan, Keiichi Ono, signed the Exchange of Notes for a loan to support the construction of hydropower plants in Bhutan.

Under this agreement, the Government of Japan will provide an Official Development Assistance (ODA) loan of JPY 13.688 billion for the development of small hydropower projects—Druk Bindu and Jomori. This includes the construction of the Jomori HydropowerPlant (90 MW) and Druk Bindu I & II  Hydropower Plants (18 MW & 8 MW), along withnecessary transmission lines.

In addition to this support, Japan has previously extended two budgetary support loans to Bhutan:

• The COVID-19 Crisis Response Emergency Loan (JPY 3.3 billion, 2022) to address the economic impact of the pandemic.

• The Development Policy Loan for Economic Recovery and Resilience Enhancement (JPY 6.55 billion, 2023) to promote post-pandemic economic stability and resilience.

These loans have played a crucial role in mitigating the negative impacts of the COVID-19 pandemic on Bhutan’s balance of payments and economic recovery efforts.

Japan has been a steadfast development partner of Bhutan, providing generous assistance in various sectors, including agriculture, telecommunications, rural electrification, infrastructure development, education, and disaster management. Over the years, Japan has supported Bhutan with assistance for bridges and schools, providing fire engines, police patrol cars,compactor trucks, ambulances, medical equipment, and farm machinery.

This soft loan for the small hydropower projects will help meet Bhutan’s growing energy demands and further strengthen the enduring bonds of friendship, understanding, and cooperation between Bhutan and Japan.

On behalf of the Government and People of Bhutan, Ambassador V. Namgyel expressed deep appreciation to the Government and People of Japan for their unwavering and generous support toward Bhutan’s socio-economic development and for their continued commitment in the years ahead.