Bhutan’s Minister of Energy and Natural Resources, Lyonpo Gem Tshering, held discussions with Union Minister of Power Manohar Lal, at a meeting here on Tuesday which focused on strengthening the longstanding cooperation between the two nations in the power sector.

During the discussions, both sides deliberated on the commercial optimisation of power output from the Punatsangchhu-II Hydroelectric Project (1020 MW). Emphasis was also placed on the early commissioning of the Punatsangchhu-I Hydroelectric Project (1200 MW), according to an official statement issued after the meeting.

The discussion also covered the way forward for the Sankosh Hydropower Project. In addition, India and Bhutan discussed the transmission infrastructure planning up to the year 2040, for which detailed consultations are currently underway. It also covered the need to streamline approval for scheduling of power, particularly during lean months in Bhutan, the statement said.

The Ministers appreciated the mutual friendship of the two nations and looked forward to further strengthening it. Minister of State for Power and New and Renewable Energy, Shripad Naik, and senior officials of the power ministry were also present at the meeting.

In November 2025, Prime Minister Narendra Modi inaugurated the 1020 MW Punatsangchhu-II Hydroelectric Project constructed under a bilateral agreement between India and Bhutan, marking a major milestone in the energy partnership between the two countries. The two sides also reached an understanding on the resumption of work on the main dam structure of the 1200 MW Punatsangchhu-I Hydroelectric Project.

India has extended a Rs 4,000 crore Line of Credit (LoC) to Bhutan to spur economic development in the Himalayan country.

In another key development to strengthen bilateral cultural ties PM Modi announced the granting of land in Varanasi for building a Bhutanese Temple and Guest House in the holy city.

Besides, the two sides have decided to establish an Immigration Check Post in Hatisar across Gelephu.

Memoranda of Understandings (MoUs) signed during PM Modi’s visit include an MoU on cooperation in the field of Renewable Energy signed by Lyonpo Gem Tshering, Minister for Energy and Natural Resources, Bhutan and Pralhad Venkatesh Joshi, India’s Minister for New and Renewable Energy.

The MoU seeks to institutionalise the bilateral engagements in the field of renewable energy and aims to work together in areas such as Solar energy, Wind energy, Biomass, Energy Storage, Green Hydrogen and capacity building in these areas.