In Punatsangchhu basin, there are  seventeen Hydro Power projects with total capacity of 8,035 MW identified in the Power System Master Plan (PSMP) of Bhutan-1993. Two projects namely, Punatsangchhu-I and Punatsangchhu-II were selected for the formulation of PSMP-2003. Punatsangchhu-I (1,200 MW) & Punatsangchhu-II (1,020 MW) are the two first projects taken up for development towards the result of the 10,000 MW by 2020, initiative taken by Royal Government of Bhutan (RGoB) and Government of India (GoI) in May 2008.

The project is located on the right bank of Punatsangchhu river along the Wangdue-Tsirang highway between 20 km and 35 km downstream of Wangdue Bridge. The Dam site is about 94 km from Thimphu along the highway. Paro, the nearest airport is about 125 km away. The nearest railway station is at Hasimara on Siliguri-Alipurduar Broad Gauge line of NEF Railway. The project area is also accessible from Bagdogra Airport near Siliguri and via Phuentsholing-Semtokha (near Thimphu) – Dochula (about 440 km). The project area can also be approached from Gelephu, a border town in South Central Bhutan.


The Bilateral Agreement between the Royal Government of Bhutan (RGoB) and Government of Republic of India (GoI) for implementation of the (990 MW latter on revised to 1,020 MW), Punatsangchhu-II Hydroelectric project was signed on July 30, 2010 by H.E. Lyonpo Khandu Wangchuk, Hon’ble Minister for Economic Affairs on behalf of the Royal Government of Bhutan (RGoB) and H.E. Shri S.M. Krishna, Hon’ble Minister for External Affairs on behalf of the Government of India (GoI) and on the same auspicious day, the foundation stone of the project was laid jointly by H.E. Jigme Y. Thinley, Hon’ble Lyonchhen (Prime Minister) of Bhutan and H.E. Dr. Manmohan Singh, Hon’ble Prime Minister of India.

The project was sanctioned at a cost of ₹/Nu. 37, 778 million (base cost excluding IDC & March 2009 price level) with an installed capacity of 990 MW (latter on revised to 1,020 MW). It is funded by the Government of India (GoI): 30% grant and 70% loan at 10% annual interest, repayable in 30 equated semi-annual installments commencing one year after the mean date of operation. The Government of India (GoI) shall be providing additional funds, as mutually determined, for the completion of the project, in the same proportion and on the same terms and conditions. All the surplus power from the project will be exported to India. The project Authority shall be dissolved within two years after the commissioning and the project shall be handed over to the Royal Government of Bhutan.

 The “Constitution” of the Authority (drafted in line with the provisions of the Bilateral Agreement) was approved by the Authority in its first Meeting by the Royal Government of Bhutan (RGoB) on December 312010 with effect from May 1, 2010.

The project implementation started on December 17, 2010 (Zero Date) with an ambitious completion schedule of 7 years including 2 years of infrastructure development.


The total staff strength of PHPA-II as of February 28, 2023, is 811, out of which 796 are Bhutanese and 15 are Indian national.

The nationality wise breakup is as given below: