(Excluding Major Projects)

Financial requirements

A sum of 6,217.949 million (excluding major projects cost) is budgeted for the implementation of the 9FYP power sector programmes. The capital budget outlay is estimated at Nu 4,500 million, of which the technical assistance component is estimated at Nu 505 million. Regular costs for running and maintenance of the system are estimated at Nu 1,717.949 million for the whole 9FYP period. The regular budget is to support the system establishment costs, which include pay and allowances of regular staff, hiring of buildings, utility charges and others.

Manpower requirement

Presently, 850 regular staff is employed within the Power Department for planning, operations and management of the system. After corporatization, only about 170 staff (20 per cent of the present strength) will remain. Additional manpower will be required to implement plans and programmes during the 9FYP. The average cost of establishment (including manpower, social cost, overhead charges) is estimated at Nu 0.300 million per regular employee.

Technical assistance

Technical assistance of Nu 505 million is required for institutional capacity building, formulation of Master Plans, and feasibility studies of major programmes and projects. Consultant services required for complex engineering design and engineering supervision are built into infrastructure budgets. All programmes will require external technical assistance and experts especially when programmes involve new technology or modality, and are new to Bhutan. About 20 per cent of technical assistance can be provided by local consultants. A sum of Nu 161.5 million for technical assistance is already secured from NORAD for the update of the Water Resources & Hydro Master Plan, and from ADB for RE loan project preparatory assistance and formulation of guidelines for private sector participation in the hydropower sector.

Total costs of external technical assistance are estimated at Nu 0.625 million per man-month, and domestic consultancy at one-fourth the international cost. 50 per cent of man-months for technical assistance services can be availed locally.



A portion of the Power Generation Programme is proposed to be financed through internal revenue savings as equity investment by the Government, while microhydro development and technical assistance projects are proposed for assistance through grants from donors. The Transmission Programme is proposed for financing through grant from donors, such as the Government of India, and internal financing (project tied). The Distribution Programme is, especially concerning rural electrification, proposed for financing from internal savings, grant assistance from donors (India, the Netherlands, Austria) and very soft loans from ADB under its rural poverty reduction programme. Most technical assistance programmes are proposed to be funded by donors (especially feasibility studies, master plans, etc) and through project-tied major infrastructure projects’ fund for technical design and supervision.



Most of activities in the 9FYP, such as power transmission and rural electrification, shall be carried out by BPC (at present, the Department of Power) on order-by-order basis through electricity supply sections based in each Dzongkhag. Contractors (private sector) and beneficiaries will augment institutional implementation capacity. Autonomous bodies shall implement major hydropower projects. Planning and feasibility studies shall be implemented by departments under the Ministry of Energy and Water Resources. Dzongkhags and relevant sectors shall be consulted while framing detailed implementation plans, studies and strategies. Environment clearance and any other sectoral/stakeholder clearance will be sought before programme activity is initiated in the field. A cost-sharing principle shall be encouraged, including community labour contribution and commitment, especially in the rural electrification programme. Private sector participation especially during the construction phase is necessary to augment the implementation capacity of Government-owned implementing agencies.

Success will depend upon fund mobilization ability. Unless funds are secured, the implementation strategy will not work. A rolling plan concept has to be adopted to avoid spillover. Therefore, an integrated programming concept is being adopted during the 9FYP. Constant monitoring and evaluation should form part of the programme management strategy.



For quality control and smooth management of programmes and projects, monitoring and evaluation must be integrated. Unless constraints, problems and delays are reported in a timely manner through regular monitoring and evaluation mechanisms, delays in programme activities are bound to occur. The Department of Power and Bhutan Electricity Authority will, on behalf of the Government, do most of the monitoring. Where donor financing is provided, the donors will also be involved in monitoring and evaluation. Prior to implementation of the projects, programme activity charts will be developed, showing schedules and identifying physical and financial milestones of the activities. The programme charts will be used for strict monitoring and evaluation. Each project shall have its own monthly progress review meeting, where progress of activities and programmes will be reported in a quarterly manner to higher authorities and monitoring agencies.