New Delhi/UNI: Prime Minister Narendra Modi, during his interaction with Bhutan King Jigme Khesar Namgyel Wangchuck, reaffirmed India's deep commitment to the unique ties of friendship and cooperation with Bhutan and reiterated continued and full support to its socio-economic development based on the priorities of the Royal Government and as per the vision of the King.

According to the Joint Statement issued on Wednesday following the talks between the two leaders on Tuesday,

"Guided by the philosophy of Gross National Happiness, and in consonance with the priorities of the people and Royal Government of Bhutan, both sides recognized that the long-standing Bhutan-India development partnership is reflective of strong ties of friendship and cooperation based on trust and mutual understanding."

The Indian side agreed to step up support for Bhutan’s 13th Five Year Plan which was welcomed by the Bhutanese side.

The Bhutanese side also noted with satisfaction the timely flow of funds from GOI to ensure smooth and uninterrupted progress of projects under the 12th Five Year Plan with about 90 percent of India’s committed plan assistance to Bhutan already released, the joint statement said.

The Bhutanese side expressed appreciation to the Indian side for extending the Standby Credit Facility at reduced interest rate and extended settlement period, and for providing an additional currency swap support of USD 200 Million.

The Indian side agreed to positively consider Bhutan's request to extend an additional Standby Credit Facility (SCF) for a period of five years.

Under Hydropower cooperation, it said the two sides have a productive arrangement whereby Bhutan receives a steady stream of revenue from the sale of power from hydropower plants which have been jointly developed, and India benefits from the assured supply of energy. The role of hydropower projects in helping the Bhutanese economy during the COVID-19 induced global economic slowdown was noted in this context.

Both sides reviewed various elements of bilateral hydropower cooperation and expressed satisfaction that projects totalling 2136 MW, which have been jointly set up, are functioning well. Both sides also welcomed the recent handing over of 720 MW Mangdechhu HEP to Bhutan.

In terms of ongoing projects, both sides reiterated their commitment to find a technically sound and cost-effective way forward for Punatsangchhu-I HEP (Punatsangchhu I is a 1.2GW run-of-the-river hydroelectric power project under construction in the Wangdue Phodrang district of Bhutan. Due to a landslide, the project has been stalled and costs have escalated.)

Both sides expressed satisfaction with the progress in construction of the 1020 MW Punatshangchhu-II HEP and looked forward to its commissioning by early 2024. Both sides agreed to expeditiously conclude the tariff protocol.

On the periodic revision of tariff of Chhukha HEP, the Bhutanese side welcomed India’s offer to revise the tariff to Rs. 3 per unit, which represents a 17% increase.

The Bhutanese side thanked India for enabling the import of power from India to meet Bhutan’s energy deficit during the winter months. The Indian side agreed to positively consider Bhutan’s request for sale of power into the Indian Energy Exchange from the 64 MW Basochhu HEP.

Both sides reiterated the importance of cooperation in the hydropower sector and the urgent need to review and finalize modalities for new projects including Sankosh HEP.

The Indian side assured consideration on Bhutan’s request for access to financing and market for power sale for new and upcoming hydropower projects in Bhutan.

It was also agreed to extend India-Bhutan energy partnership in the area of non-hydro renewables, such as solar and wind as well as in green initiatives for e-mobility.

On the proposed trilateral hydropower cooperation among Bhutan, Bangladesh and India, both sides expressed their commitment towards greater sub-regional cooperation, including in the energy sector.

The two sides welcomed the growing strength of bilateral trade and economic ties.