Tata Power intends to invest Rs 1,572 crore to purchase a 40% equity position in a special purpose vehicle (SPV) that would build the 1,125 MW Dorjilung hydropower project in Bhutan, with a total project cost of Rs 13,100 crore.

Key Highlights

• Tata Power to invest ₹1,572 crore for a 40% stake in the 1,125 MW Dorjilung Hydro Project in Bhutan.
• The project, costing around ₹13,100 crore, supports Tata Power’s push into green energy and regional investment. 

According to the regulatory filing, the SPV has yet to be incorporated, and the transaction does not qualify as related party transactions at this time. After completion, the SPV will become an associate company of Tata Power and thereafter a linked party.

"This project will support the company to accelerate its clean and green energy transition," Tata Power's spokesperson said. The shareholders' agreement requires that the first tranche of the transaction be completed within six months.

The Khorlochhu project has acquired a financing agreement for Rs 4,829 crore from Power Finance Corporation. Praveeer Sinha, CEO and MD, said: "Tata Power is very well positioned to expand further with 10 GW of clean capacity underconstruction including a healthy pipeline of 5 GW Hybrid and FDRE projects."

Also Read: India Grants Rs 4,000 Cr Credit to Bhutan, Strengthens Bilateral Ties

He went on to say: "Withproposed amendments to the Electricity Act, Tata Power is well positioned to expand itsdistribution footprint to 40 million consumers by 2030." The company's backward-integrated solar production facilities are currently at full capacity.

The acquisition in Bhutan is a critical component of Tata Power's medium-term ambition to drive its clean and green energy transformation through large-scale foreign initiatives. The terms and conditions of the agreement with Druk Green Power Corporation Limited describe the structure for the multi-phased investment, with all parties anticipating the formation of the SPV and the signing of the shareholders' agreement.