Anil Ambani's co partners DHI to set up 1.2 GW solar, hydro power in Bhutan

Partnership marks the group's maiden foreign venture

Marking its first foreign venture, Anil Ambani-led Reliance Group on Wednesday said it has entered into a partnership with Druk Holding and Investments (DHI), the commercial arm of the Royal Government of Bhutan, to jointly develop solar and hydropower projects in the neighbouring country.

In its statement, the group did not disclose the investments for the planned 500 megawatt (MW) solar and 770 MW hydro power capacities. However, it added, this is the largest foreign direct investment (FDI) in Bhutan’s renewable energy sector.

To set up these capacities, the Anil Ambani group said it has newly established Reliance Enterprises, a 50:50 subsidiary of Reliance Infrastructure and Reliance Power. The new subsidiary will spearhead the green energy initiatives,  the company said.

The press statement did not disclose the nature of partnership with DHI. According to people in the know, this would entail an equity partnership of 50 per cent for solar capacities and 51 per cent for hydro capacities coming from DHI.

Details on the nature of the project, whether through a power purchase agreement or an engineering, procurement and construction (EPC) contract, were not available.

The 500 MW solar power plant in Gelephu Mindfulness City in Bhutan is set to be developed in two phases over the next two years. Upon completion, it will be the largest solar installation in Bhutan, the Reliance Group said.

Additionally, Reliance Power and DHI will co-develop the 770 MW Chamkharchhu-1 hydropower project, a run-of-the-river venture, which, the group said, will add to Bhutan’s current installed power capacity of 2,452 MW.

Wednesday’s statement is part of a series of new announcements from the group for its two main entities – Reliance Power and Reliance Infrastructure.

Last week, Reliance Power’s board approved a preferential issue of equity shares worth Rs 1,525 crore to aid its renewable energy investments. This includes the issuance of 46.20 crore equity shares or warrants convertible into equity shares, aimed at reducing debt and funding growth initiatives.

DHI was established in 2007 through a royal charter to manage the government's long-term investments. DHI holds shares in 24 domestic companies across sectors, including manufacturing, energy, and natural resources.