**Executive Summary**
Union Minister Shri Manohar Lal commenced a four-day visit to Bhutan on April 9, 2026, to reaffirm bilateral partnerships in clean energy and sustainable development. The visit focused on strengthening hydropower cooperation and resulted in the signing of the Tariff Protocol for the 1020 MW Punatsangchhu-II Hydroelectric Project and a new methodology for Reactive Energy Accounting. These initiatives establish an enhanced bilateral institutional framework to streamline regional power trade and ensure long-term energy security.
**Key Points / Main Content**
**Diplomatic Engagements and Strategic Vision**
* Meetings held with Bhutanese Prime Minister Shri Tshering Tobgay and Energy Minister Lyonpo Gem Tshering to advance cooperation in clean energy.
* Discussions focused on strengthening the ongoing hydropower sector while exploring future avenues in renewable energy and regional power trade.
**Enhanced Institutional Framework**
* Established a bilateral institutional framework mechanism for the regular review and coordination of power sector initiatives.
* Cooperation areas include non-hydro energy, cross-border transmission, project financing, capacity building, and institutional partnerships.
**Punatsangchhu-II Hydroelectric Project**
* Signed the Tariff Protocol for the 1020 MW Punatsangchhu-II project, marking a major step in mutually beneficial hydropower cooperation.
* The project, inaugurated on November 11, 2025, has been exporting surplus power to India since September 19, 2025, at a mutually agreed starting tariff.
**Technical Framework for Grid Stability**
* Signed the "Methodology for Reactive Energy Accounting of the reactive power exchange."
* This technical framework aims to enhance grid stability, improve the efficiency of cross-border electricity exchange, and streamline bilateral power trade.
**Impact Analysis**
**Ministry of Power (India) and Ministry of Energy & Natural Resources (Bhutan)**
**Impact**
The establishment of an enhanced institutional framework strengthens bilateral ties and provides a formal structure for managing energy security and sustainable development goals.
**Action Required**
Both ministries must engage in regular reviews and coordination of ongoing and future initiatives through the newly established framework mechanism.
**Grid Operators and Power Utilities**
**Impact**
Entities involved in cross-border electricity trade will benefit from improved grid stability and a standardized technical framework for power exchange.
**Action Required**
Operators must implement the new Methodology for Reactive Energy Accounting to streamline bilateral power trade and improve exchange efficiency.
**Project Stakeholders of Punatsangchhu-II**
**Impact**
The signing of the Tariff Protocol formalizes the economic relationship regarding the export of surplus power from the 1020 MW project to India.
**Action Required**
Stakeholders must ensure compliance with the agreed starting tariff and the protocol requirements established during the ministerial visit.
Key Entities Referenced
Punatsangchhu-II Hydroelectric Project: A 1020 MW joint hydropower project between India and Bhutan, central to bilateral energy cooperation and surplus power export to India.
Tariff Protocol of Punatsangchhu-II Hydroelectric Project: A signed agreement establishing the mutually agreed pricing and framework for the export of power from the project to the Indian grid.
Methodology for Reactive Energy Accounting: A technical framework signed to enhance grid stability and improve efficiency in the cross-border electricity exchange between India and Bhutan.
Ministry of Power: The primary Indian government department responsible for the bilateral energy partnership and institutional framework mechanisms with Bhutan.
Bhutan: The strategic partner country for India's clean energy initiatives and the location for the Punatsangchhu-II Hydroelectric Project.
Ministry of Power
Union Minister Shri Manohar Lal Arrives in
Bhutan; Reaffirms India–Bhutan Partnership on
Clean Energy and Sustainable Development
India and Bhutan Sign Tariff Protocol of Punatsangchhu-II
Hydroelectric Project and The Methodology for Reactive
Energy Accounting of the Reactive Power Exchange
Posted On: 09 APR 2026 3:18PM by PIB Delhi
The Union Minister of Power and Housing & Urban Affairs, Shri Manohar Lal, arrived in Bhutan today
for a 4-day visit. His visit marks another important step in the deepening of India–Bhutan bilateral ties.
India and Bhutan share exemplary bilateral relations, characterized by mutual trust, understanding, and
close cooperation across sectors. The visit underscores the shared vision of both countries to further
strengthen collaboration in energy security and sustainable development.
Shri Manohar Lal called on the Prime Minister of Bhutan, Shri Tshering Tobgay. During the meeting the
two leaders reaffirmed the shared commitment of the two nations to advance cooperation in clean energy
and sustainable development.
In another meetiing with the Lyonpo Gem Tshering, Minister for Energy & Natural Resources, Royal
Government of Bhutan, Shri Manohar Lal held discussions that focused on strengthening ongoing
cooperation in the hydropower sector and on future avenues in renewable energy and regional power
trade.
Expanding the scope of cooperation in the power sector, India and Bhutan have established an enhanced
bilateral institutional framework mechanism. This mechanism will enable regular review and coordination
of ongoing and future initiatives between the two countries to further strengthen collaboration. Key areasof cooperation include non-hydro energy, cross-border transmission, project financing, capacity building,
and institutional partnerships.
On this occasion the two sides signed:
(i) Tariff Protocol of Punatsangchhu-II Hydroelectric Project, marking another step in mutually beneficial
hydropower cooperation between the two countries. The 1020 MW Punatsangchhu-II Hydroelectric
Project was jointly inaugurated by Shri Narendra Modi, Prime Minister of India and His Majesty Jigme
Khesar Namgyel Wangchuck, The King of Bhutan, on 11 November 2025 and commenced export of
surplus power to India from 19 September 2025 at a mutually agreed starting tariff.
(ii) The Methodology for Reactive Energy Accounting of the reactive power exchange, a technical
framework aimed at enhancing grid stability, improving efficiency in cross-border electricity exchange,
and streamlining bilateral power trade.
The engagements during the visit are expected to pave the way for new avenues of collaboration,
contributing to the continued prosperity and well-being of both nations.
*****
NR/AP
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