Bhutan Secures Major Global Backing for Clean Energy, Private Investment and Climate Resilience

Bhutan has secured significant international financial and development support to accelerate clean energy expansion, attract private investment and strengthen climate resilience following Finance Minister Lyonpo Lekey Dorji’s participation in the OPEC Fund’s 50th Anniversary and Development Forum in Vienna, Austria.

The visit marked an important milestone in Bhutan’s efforts to mobilise international financing for hydropower, solar energy, climate-resilient infrastructure and private sector development.

On the sidelines of the forum, Bhutan signed a USD 47.33 million loan agreement with the OPEC Fund for International Development to finance the 55MW Gamri-II Hydropower Project. The government also signed a Framework Agreement for Private Sector Operations, paving the way for international financial institutions to invest directly in Bhutan’s private sector.

The loan agreements, signed on June 24 at the OPEC Fund headquarters in Vienna, will support one of Bhutan’s key hydropower projects, expanding renewable energy generation, strengthening domestic energy security and increasing export potential.

Equally significant is the Framework Agreement, which establishes a legal and financial framework enabling the OPEC Fund to directly finance commercially viable private enterprises through loans, guarantees and equity investments.

The agreement is expected to improve access to international financing for Bhutanese businesses and public-private partnership projects in sectors including renewable energy, agriculture, digital technology, water supply, sanitation and infrastructure.

Lyonpo Lekey Dorji attended the forum at the invitation of Prime Minister Mia Amor Mottley of Barbados, Chair of the Climate Vulnerable Forum and Vulnerable Twenty (CVF-V20), and Abdulhamid Alkhalifa, President of the OPEC Fund for International Development.

Held under the theme “A Transition that Empowers Our Tomorrow,” the forum brought together global leaders, development banks, investors and policymakers to discuss sustainable economic growth and climate finance.

During a panel discussion, Lyonpo outlined Bhutan’s strategy for financing future infrastructure through the Bhutan Resource Mobilization Plan (BRMP). He explained that Bhutan is adopting a Capital Stacking approach that combines multiple sources of finance to reduce risk, attract investment and maximise development impact while maintaining environmental sustainability.

He said the financing strategy is rooted in Bhutan’s Gross National Happiness philosophy, which balances economic development with environmental conservation and the well-being of its people.

Lyonpo also participated in the launch of the Vulnerability to Viability (V2V) Compact, an international initiative aimed at improving access to affordable development finance for climate-vulnerable countries.

The initiative seeks to increase financing for sectors such as water, health and education while encouraging development finance institutions to work more closely with governments in identifying national priorities and sharing financial risks.

During the discussions, Lyonpo stressed that global climate finance must better reflect the realities of countries like Bhutan, which contribute little to global greenhouse gas emissions yet face disproportionate climate impacts.

He called for more favourable financing terms, including lower interest rates, longer repayment periods and greater concessional financing. He also advocated for financial mechanisms that can be deployed rapidly following climate disasters without placing additional fiscal burdens on vulnerable countries.

The finance minister also presented the Gelephu Mindfulness City (GMC) to international investors and development partners, describing it as a sustainable Special Administrative Region that integrates environmental conservation, mindful urban planning and economic innovation.

He invited development finance institutions to participate in the project, highlighting Bhutan’s political stability, investor-friendly legal framework and commitment to sustainable development.

Beyond the forum, Lyonpo held bilateral talks with the Chief Executive Officer of the Saudi Fund for Development to explore financing for the proposed 110MWp Tsephu Solar Project. Discussions also covered broader cooperation in renewable energy, climate resilience and green technology.

Bhutan also held meetings with senior officials from the World Bank, the African Development Bank and other international financial institutions to explore future collaboration on sustainable financing and climate-resilient investments.

The Vienna forum attracted nearly 650 participants, including representatives from the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank, African Development Bank, Inter-American Development Bank Group, IFAD, the Central American Bank for Economic Integration, private investors, technology experts, academics and international organisations.

For Bhutan, the outcomes extend well beyond the signing of financial agreements. They reflect growing international confidence in the country’s development vision while unlocking new sources of financing to expand clean energy, strengthen climate resilience, stimulate private sector growth and create long-term economic opportunities.

Meanwhile, partnerships with institutions such as the OPEC Fund are expected to play an increasingly important role in transforming national priorities into lasting economic progress while preserving the country’s unique environmental and cultural heritage.

Sherab Dorji, Thimphu

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