NEW DELHI/KATHMANDU, Nov 11 — India and Bhutan expanded their energy ties on Tuesday during Prime Minister Narendra Modi's visit to the Himalayan nation, where he extended a 40 billion rupee (RM1.88 billion) line of credit and inaugurated a hydroelectric power project.
India's outreach to Bhutan is seen as an effort to grow its influence in the region and draw the country wedged between China and India closer to New Delhi as Beijing steps up its engagement to resolve a long-running border dispute with Bhutan and establish diplomatic relations.
Modi is on a two-day visit to the country, and addressed a gathering today to mark the birthday celebrations of Bhutan's King Jigme Khesar Namgyel Wangchuck's father.
"The partnership of trust and development between India and Bhutan stands as a model for the entire region. As both our countries progress rapidly, our energy partnership is further accelerating this growth," he said.
Later in the day, Modi inaugurated the India-funded 1,020-megawatt Punatsangchhu-II hydroelectric power project, which he said would increase Bhutan's hydropower generating capacity by nearly 40 per cent.
It is the fifth Indian-backed hydropower project in the country, which together generates nearly 3,000 megawatts of power. New Delhi has stated that the line of credit extended by India today is also intended to fund energy projects.
Former Bhutanese energy minister Lok Nath Sharma said the excess energy will be exported to India after meeting local demand of about 1,000 megawatts.
Indian private companies like Tata Power, Adani Group, and Reliance Power have signed agreements with Bhutan's Druk Green Power Corporation to build hydroelectric projects.
