Shares of Reliance Power Ltd were trading 3% higher on 19 May after the company announced inking a commercial term sheet for a long-term Power Purchase Agreement (PPA) with Green Digital Pvt Ltd (GDL) to create a 500 megawatt (MW) solar power facility.

Green Digital is owned by Druk Holding and Investments Ltd (DHI), the Royal Government of Bhutan’s investing arm.

The deal specifies the creation of Bhutan’s largest solar power plant as a 50:50 joint venture between Reliance Power and DHI, the company said in a stock exchange filing.

Reliance Power stated in an exchange filing that the project, under the build-own-operate (BOO) model, entails a capital outlay of up to Rs 2,000 crore, representing the highest foreign direct investment (FDI) in Bhutan’s solar energy industry to date.

This solar program is expected to diversify Bhutan’s renewable energy mix, which is currently dominated by hydropower. It will also improve grid stability and help to promote regional clean energy integration and cross-border infrastructure collaboration in South Asia.

In October 2024, Reliance Enterprises, a joint venture between Reliance Power Ltd and Reliance Infrastructure Ltd, formed a strategic agreement with DHI to construct solar and hydropower projects in Bhutan. The cooperation involves the construction and long-term operation of the 770 MW Chamkharchhu-I hydropower project, which is structured as a long-term concession model.

The 500 MW solar project will be developed in stages over the following 24 months, in accordance with Bhutan’s national sustainability framework and the larger regional energy transformation agenda.

Reliance Power has started the engineering, procurement, and construction (EPC) bidding process in compliance with worldwide competitive bidding guidelines. The company is also working with financial institutions to provide long-term, sustainable project financing solutions that aim to optimise capital structure, according to the company.

At 3:30 pm, the shares of Reliance Power closed 1.24% higher at Rs 45.63 on NSE.

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