Adani and Druk Green sign deal for 770 MW Chamkharchhu-I in Bhutan

What happened

The agreement was signed in the presence of Bhutan's Prime Minister, Tshering Tobgay. The project will sit on the Chamkharchhu river in Zhemgang district, in central Bhutan. It is designed as a peaking run-of-river scheme. DGPC will hold 51 percent of a new Bhutanese project company and Adani Power will hold 49 percent. According to an industry report, the project company will be a Bhutanese public company. Dasho Chhewang Rinzin, managing director of DGPC, said the deal strengthens the long energy partnership between Bhutan and India.

The plant will be developed on a build, own, operate and transfer basis. The project company will build and run the plant under a 30-year concession that starts on the date of commercial operation. After that, ownership passes to Bhutan. Construction is expected to begin in the first half of 2027, and the partners aim to commission the plant within six years of breaking ground. No investment cost or annual energy figure was given in the reports.

This is the second project for the two companies. In September 2025 they agreed to develop the 570 MW Wangchhu project. Both fall under a memorandum of understanding signed in May 2025 to develop up to 5,000 MW of hydropower in Bhutan. The partners say they are still studying more projects under that plan. Anil Sardana, managing director of Adani Power, said hydropower would play a central role in South Asia's move to cleaner energy.

The engineering behind it

A run-of-river plant uses the natural flow of a river with little or no storage. A low weir or dam diverts part of the river into an intake. The water passes through a desanding basin, where sand and silt settle out so they do not wear down the turbines. It then travels through a long headrace tunnel to a point far downstream and much lower. From there, a steep pipe called a penstock drops it onto the turbines in the powerhouse. This is a general description of the type.

A peaking run-of-river plant adds a small amount of storage, often a pond or a stretch of river held behind the weir. The plant can hold water for a few hours when demand is low and release it when demand is highest, usually in the evening. This makes the plant more useful to the grid than a plain run-of-river plant, which must generate whenever the water arrives. The reports describe Chamkharchhu-I as this type but do not give its storage volume.

The seasonal split in this project follows from the river. In the monsoon, Himalayan rivers carry much more water than the plant needs for local demand, so the surplus can be exported. In winter, flows fall and so does output, but local demand rises. A plant designed for winter peaks in Bhutan and summer exports to India makes use of both seasons. Engineers size the turbines and tunnel with river flow records in hand, so hydrology is the starting point of every design.

Sediment and rock are the two hardest problems on Himalayan run-of-river plants. Monsoon rivers carry large loads of fine sand, and quartz particles can erode turbine blades within a few seasons if the desanding basin does not remove them. Long headrace tunnels pass through rock that changes quickly, from strong rock to crushed fault zones. Engineers plan support, drainage and inspection access for the whole tunnel length. These are general challenges of the type, not reported details of this project.

What it means in Nepal

Nepal faces the same seasonal pattern. A Kathmandu Post column in March 2025 noted that Nepal's power system is built mainly on run-of-river hydropower, which produces heavily in the monsoon and much less in winter. The only reservoir scheme, Kulekhani I, II and III, has a dependable capacity of just 106 MW. As a result, Nepal imports electricity from India in the dry season and exports it during the rainy months.

Winter is the weak season. The same column reported that peak winter demand in Nepal had reached about 2,316 MW by mid-2024, against an installed capacity then of 3,157 MW that produces only a fraction of its rating in the dry months. Imported power in winter can cost up to Rs 16 per unit. Republica put the average export price in 2025/26 at Rs 7.56 per unit. Storage and peaking capacity that shift water from low-demand hours to the evening peak have clear value in this situation.

Exports have grown fast. Republica reported in July 2026 that Nepal earned a record Rs 29.32 billion from electricity exports in fiscal year 2025/26. It exported about 3.88 billion units, mostly to India, with some to Bangladesh. The article said Nepal first became a net exporter in fiscal year 2023/24. Imports in 2025/26 fell by about 32 percent. Like Bhutan, Nepal is building a business on selling monsoon surplus to its southern neighbour.

For students, the Bhutan project shows the kind of work this model creates. Each plant needs engineers for hydrology and flow studies, headworks and desanding design, tunnels in Himalayan rock, powerhouses, and transmission lines to carry power across the border. It also needs people who understand concession agreements, joint ventures and power sales, because those decide whether a project is built at all. Peaking design, which helps Nepal's winter evening demand, is one skill worth following closely.