PM Modi Inaugurates Punatsangchhu-II Hydroelectric Project with $455 Million Credit Line

Prime Minister Narendra Modi’s visit to Bhutan has given a strong boost to India–Bhutan relations, focusing on renewable energy and regional cooperation. During his visit, PM Modi announced a $455 million line of credit and inaugurated the India-funded Punatsangchhu-II hydroelectric project, marking another milestone in the two countries’ long-standing friendship and shared vision for sustainable growth.

PM Modi Inaugurates Punatsangchhu-II Hydroelectric Project

Expanding Energy Cooperation

The newly inaugurated 1,020-megawatt Punatsangchhu-II hydroelectric project is one of Bhutan’s largest renewable energy ventures. Developed with Indian financial and technical assistance, it will increase Bhutan’s total hydropower capacity by nearly 40%.
This project reflects India’s “Neighbourhood First” policy, which promotes regional energy cooperation and clean power trade. It will help Bhutan export surplus electricity to India, boosting Bhutan’s economy and supporting India’s transition to green energy.

Strategic and Diplomatic Significance

PM Modi’s visit comes amid increasing geopolitical interest in Bhutan from other nations. By deepening energy and economic ties, India reinforces its position as Bhutan’s most trusted development partner.
Addressing a gathering in Thimphu, Modi described the India–Bhutan partnership as a “model for trust and development” in South Asia. The collaboration highlights shared goals in economic growth, environmental protection, and regional security.

Financial Support and Development Initiatives

The $455 million line of credit announced by India will support projects in infrastructure, renewable energy, and connectivity. Over the years, India has played a crucial role in Bhutan’s progress by funding and building multiple hydropower plants that now supply clean electricity to Indian states.
This cooperation strengthens both countries’ economic interdependence while promoting regional stability and sustainable growth.

Future Vision for Bilateral Relations

Beyond energy, the visit represents the shared vision of India and Bhutan to build a greener, more connected, and prosperous South Asia. Through investments in sustainable infrastructure, education, and climate-friendly projects, both nations are working to set an example of mutual growth and friendship in the Himalayan region.

Exam-Oriented Notes

• PM Modi visited Bhutan on 11 November 2025.
• Announced a $455 million line of credit for development projects.
• Inaugurated the 1,020 MW Punatsangchhu-II hydroelectric project.
• The project will increase Bhutan’s hydropower capacity by 40%.
• Strengthens the “Neighbourhood First” policy and India–Bhutan cooperation.

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Question & Answer

Q1. During his 2025 visit to Bhutan, what amount of line of credit did PM Modi announce?
(a) $300 million
(b) $455 million
(c) $500 million
(d) $600 million
Answer: $455 million

Q2. What is the capacity of the newly inaugurated Punatsangchhu-II hydroelectric project in Bhutan?
(a) 520 MW
(b) 850 MW
(c) 1,020 MW
(d) 1,500 MW
Answer: 1,020 MW

Q3. The Punatsangchhu-II project was developed with assistance from which country?
(a) China
(b) Japan
(c) India
(d) Nepal
Answer: India

Q4. Which Indian policy focuses on strengthening relations with neighbouring countries like Bhutan?
(a) Act East Policy
(b) Neighbourhood First Policy
(c) South Asia Partnership Policy
(d) Look West Policy
Answer: Neighbourhood First Policy

Q5. By how much will Bhutan’s hydropower capacity increase after the completion of the Punatsangchhu-II project?
(a) 20%
(b) 30%
(c) 40%
(d) 50%
Answer: 40%

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