Adani Power Partners With DGPC For 770 MW Hydropower Project In Bhutan

Market snapshot: Adani Power Limited has entered into a strategic joint venture with Bhutan's state-owned utility, Druk Green Power Corporation Limited (DGPC), to develop the 770 MW Chamkharchhu-I Hydropower Project in Zhemgang District, Bhutan. The partnership forms part of a broader bilateral clean energy roadmap to establish 5,000 MW of hydropower capacity in the Himalayan nation.

Data Snapshot

• The project involves setting up a 770 MW peaking run-of-river hydropower plant in Zhemgang District, central Bhutan.
• Adani Power and Druk Green Power Corporation will hold a 49% and 51% stake in the joint venture company respectively.
• The project will be executed under a Build, Own, Operate, and Transfer model with a concession period of 30 years from commercial operations.

What's Changed

• This is the second major hydroelectric project under the Adani Group-DGPC partnership, following the 570 MW Wangchhu project agreement signed in September 2025.
• The project was previously structured under a strategic agreement with Reliance Power in October 2024, but has been re-allocated to Adani Power following Reliance's withdrawal from the Bhutan clean energy pipeline.

Key Takeaways

• Adani Power and Druk Green Power Corporation will form a joint venture company with a 49% and 51% shareholding structure respectively, each nominating 3 directors to the board.
• The project is located in central Bhutan's Zhemgang District and uses a peaking run-of-river model.
• Construction is slated to begin in the first half of 2027, with commissioning targeted within 6 years of groundbreaking.
• Financing and power transmission will align with Bhutan's domestic winter requirements and export surplus power to India during summer months.

SAHI Perspective

This agreement marks a significant shift in Adani Power's generation portfolio. Traditionally a thermal-dominated private power producer with 18.2 GW capacity, Adani Power is diversifying into stable, high-margin green assets like run-of-river hydro. Taking over the project after Reliance Power's exit highlights Adani's execution capability and strategic positioning as a preferred cross-border partner, expanding its target of 5,000 MW hydropower capacity in Bhutan.

Market Implications

The addition of 770 MW run-of-river capacity enhances Adani Power's long-term environmental, social, and governance (ESG) rating, paving the way for institutional green funding. Furthermore, summer export revenues will bolster the firm's non-regulated cash flows, reducing dependence on domestic state distribution companies (DISCOMs).

Trading Signals

Market Bias: Bullish

Adani Power's partnership to develop the 770 MW Chamkharchhu-I project reinforces its diversification into green energy and strengthens its regional execution footprint. Combined with its existing 570 MW Wangchhu hydro project, this asset solidifies Adani's 5,000 MW target in Bhutan and elevates long-term cash flow visibility.

Overweight: Power Generation, Renewable Energy

Trigger Factors:

• Successful incorporation of the 49:51 joint venture entity in Bhutan.
• Groundbreaking and commencement of construction in H1 2027.
• Finalization of long-term power purchase agreements (PPAs) with Indian and Bhutanese utilities.

Time Horizon: Medium-term (3-12 months)

Industry Context

Bhutan aims to achieve 25,000 MW of installed power generation capacity by 2040, diversifying beyond traditional hydro projects to include solar and wind. To facilitate this massive scaling, the Bhutanese state utility DGPC is aggressively partnering with leading Indian private giants, including Tata Power and Adani Power, to build clean cross-border energy corridors that secure regional grids.

Key Risks to Watch

• High gestation periods: Run-of-river hydro plants typically face geological and structural risks during their 6-year construction cycle.
• Seasonal volatility: Hydropower output in the region is highly dependent on seasonal water flows, leading to reduced generation during dry winter months.
• Capital expenditure demands: Part of Adani's larger over ₹2 lakh crore power sector capex plan, requiring significant financing structures.

Recent Developments

On October 5, 2026, Adani Power signed the Shareholders Agreement (SHA) for the 770 MW Chamkharchhu-I Hydropower Project with Druk Green Power Corporation. Previously, in September 2025, the two companies signed the SHA and concession agreement for the 570 MW Wangchhu Hydropower Project. During the Adani Group AGM in June 2026, Chairman Gautam Adani highlighted a planned capital expenditure of over ₹2 lakh crore in the power sector over five years, alongside the target of 5,000 MW hydro capacity in Bhutan.

Closing Insight

Adani Power's strategic alignment with Bhutan's green energy vision demonstrates a powerful pivot toward sustainable utility-scale assets. By taking over the 770 MW project, Adani not only secures a long-term concession of 30 years but also enhances its long-term cash flows, establishing a robust cross-border electricity trading network in South Asia.

High Performance Trading with SAHI.