ADB Finances First Cross-Border Hydropower CDM Project

12 April 2010: The Asian Development Bank (ADB) is financing a hydropower project that will enable Bhutan to export clean energy to India and issue Clean Development Mechanism (CDM) credits.

The 114-megawatt Dagachhu hydropower project is expected to reduce carbon dioxide emissions by about 500,000 tons per year, especially through exports to India, which relies heavily on coal-fired power plants for its electricity generation. The project will help prevent carbon emissions in India while generating additional revenue from the CDM to make the project viable in Bhutan. A notable feature of the Dagachhu hydropower project is participation by multiple Bhutanese and international stakeholders, marking it as the first public-private partnership in infrastructure investment in Bhutan.

The total cost of the project is around US$200 million. ADB has committed US$80 million as a loan to the project, with cofinancing provided by the National Pension and Provident Fund of Bhutan and the Raiffeisen Zentralbank Österreich AG (RZB) of Austria. The project structuring was promoted with support from Japan. [ADB Press Release]