European Investment Bank commits €150m to renewable energy in Bhutan
The European Investment Bank (EIB), known as the world’s largest multilateral bank and a leading financier of renewable energy projects, has made a landmark commitment by signing its first-ever investment in Bhutan. This €150 million loan agreement, aimed at enhancing renewable energy generation, marks a significant milestone in Bhutan’s efforts to maintain its status as a net carbon-negative country while combating climate change impacts.
Signed during the 2024 IMF/World Bank Spring Meetings, this 30-year EIB loan will facilitate the construction of small to mid-size run-of-river hydropower plants and solar photovoltaic installations. These projects are crucial for diversifying Bhutan’s energy mix and increasing its energy security, particularly through the development of renewable resources that provide stable and sustainable power year-round.
EIB President Nadia Calviño highlighted the broader impact of such investments, stating, “Bringing green, reliable and affordable energy to communities around the world, especially in more remote regions, has huge benefits not just in environmental terms, but also by improving access to health, education, and economic activity.”
The new financing aligns with the EU’s Global Gateway initiative, which aims to enhance global and regional connectivity across various sectors including climate, energy, and digital infrastructure. The projects, set to be implemented by Druk Green Power Corporation, will not only help meet Bhutan’s ambitious Nationally Determined Contribution targets but also increase the nation’s renewable energy output significantly.
Lyonpo Lekey Dorji, Finance Minister of the Kingdom of Bhutan, expressed his gratitude and optimism for future partnerships, saying, “This partnership not only strengthens Bhutan’s renewable energy sector but also contributes to the broader regional and global effort in combating climate change.”
The EIB’s funding is expected to help Bhutan develop an additional 310 MW of hydropower and solar power generation capacity. With these new facilities, Bhutan anticipates generating approximately 670 GWh in the first year of operation alone. This boost in solar power is particularly strategic, reducing the potential need for energy imports during dry seasons when hydropower is less reliable.
Bhutan is renowned for its environmental stewardship, being one of the three net carbon-negative countries globally. The integration of solar power alongside its substantial hydropower facilities allows Bhutan to not only meet its power needs sustainably but also to continue its leadership in green energy initiatives.
This significant investment by the EIB in Bhutan’s renewable energy infrastructure is a forward-thinking move that supports both regional stability and global environmental goals. It exemplifies how strategic financial support can facilitate significant advancements in sustainable energy, setting a benchmark for other nations in climate resilience and renewable resource utilization.