(MENAFN- KNN India) New Delhi, Nov 12 (KNN) India has extended a concessional line of credit worth Rs 4,000 crore to Bhutan to support the development of new energy projects, reinforcing bilateral cooperation in the hydropower sector.

The announcement coincided with the joint inauguration of the 1,020-MW Punatsangchhu-II hydroelectric project by Prime Minister Modi and Bhutan's King Jigme Khesar Namgyel Wangchuck.

Developed with Indian assistance, the project marks a key milestone in the two countries' long-standing energy partnership and is expected to significantly increase Bhutan's electricity generation capacity while strengthening power trade with India.

During talks in Thimphu, Modi also announced efforts to improve cross-border connectivity, including plans to link Bhutan's Gelephu and Samtse regions to India's railway network.

He said the connections would expand market access for Bhutan's industries and farmers, emphasizing that connectivity creates opportunity, and opportunity creates prosperity.

The leaders witnessed the signing of three Memoranda of Understanding (MoUs) aimed at deepening cooperation in renewable energy, healthcare, and mental health.

Modi reaffirmed India's support for Bhutan's development agenda, recalling the earlier Rs 10,000-crore commitment to Bhutan's Five-Year Plan, which is being utilised across sectors such as roads, agriculture, finance, and healthcare.

Highlighting hydropower collaboration, Modi noted that the new facility would boost Bhutan's clean-energy capacity by nearly 40 percent and confirmed the resumption of work on the long-delayed 1,200-MW Punatsangchhu-I project. Once completed, it will be the largest hydropower project jointly built by the two countries.

Both governments also welcomed ongoing infrastructure and connectivity initiatives, including new immigration checkpoints, cross-border rail links, and logistics facilities designed to improve trade flows.

India additionally assured continued support for the uninterrupted supply of essential commodities and fertilisers to Bhutan.

The two sides acknowledged growing cooperation in emerging areas such as STEM, fintech, and space.

They noted progress on Phase-II implementation of UPI, which will allow Bhutanese visitors to make QR-code payments in India using local mobile applications.

Modi reiterated India's backing for Bhutan's Gelephu Mindfulness City initiative and announced an immigration check post in Assam to support movement of investors and visitors.

Both leaders underlined the importance of close cooperation in energy, connectivity, and infrastructure as central pillars of the India–Bhutan partnership.

(KNN Bureau)

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