India and Bhutan Sign MoU to Deepen Renewable Energy Cooperation

The Ministry of Energy and Natural Resources of the Royal Government of Bhutan (RGoB) and the Ministry of New and Renewable Energy, Government of India (GoI), signed a Memorandum of Understanding (MoU) on cooperation in the field of renewable energy during Indian Prime Minister Narendra Modi’s visit to Bhutan on November 11, 2025. 

PM Narendra Modi said, “It (renewable energy) is a very important dimension which is getting added because it enhances energy security of Bhutan and also brings India's skills capabilities in that area. So, the two countries signed an exchange in the presence of the two leaders and MOU on cooperation in the field of renewable energy, which will cover solar energy, wind energy, biomass energy, green hydrogen, and tree storage and energy storage in general, which I think is a very good beginning. It's a very substantive memorandum of understanding in which the two countries will look at joint design and development of energy projects in all of these areas.”

The MoU comes even as private sector firms including Reliance Power and Tata Power have shown strong interest in the country and signed up for significant renewable projects including Hydro projects, besides solar and storage . 

Scope of Cooperation

The MoU lays the foundation for collaboration encompassing solar energy, wind energy, biomass energy, green hydrogen, and energy storage technologies. It aims to leverage India's technical expertise and Bhutan’s renewable energy potential to jointly design and develop sustainable energy projects. 

This marks a strategic expansion from traditional hydropower cooperation into a broader renewable energy partnership, enhancing Bhutan’s energy security and supporting India's clean energy goals, as per the Ministry of External Affairs briefing.

Strategic Importance

The signing of this MoU reinforces the long-standing energy partnership between the two countries, which has predominantly been focused on hydropower. 

With projects like the recently inaugurated 1020 MW Punatsangchhu-II hydropower plant, Bhutan has increased its installed power capacity by 40 percent. 

The new renewable energy collaboration furthers this partnership into emerging energy sectors, demonstrating a model of regional cooperation and mutual development.

Financial and Developmental Support

Alongside the MoU, the Government of India announced a concessional line of credit worth INR 4000 crore to support Bhutan's energy sector projects. This financial assistance is expected to facilitate the implementation of renewable energy projects identified under the agreement, aligning with Bhutan’s developmental priorities, MEA said.

This MoU is expected to open doors for deeper cooperation through joint research, skill development, and technology exchange in renewable energy fields. In addition, it looks to support broader connectivity and economic cooperation agendas.