India and Bhutan have been collaborating on hydroelectric power projects since the 1960s.

But the
Cooperation between these two countries in the hydro-power sector, begun in 1988with the first project
of Chukka hydropower plant. It had proved to be the backbone of the Bhutanese economy as it
contributed more than 35 percent of Bhutan’s revenues. In this way, Bhutan has a significant amount of
hydroelectric potential, which India has helped to develop.

During the period 1998 to 2007, two following projects were commissioned between these two
countries :

 Tala Project
 Kuricchu plant
Both projects were built by India.

Then again in April 2014, these two countries signed Inter-governmental Agreement on four hydropower
projects which are following:

 Kholongchu
 Bunakha
 Wangchhu and
 Chamkharchhu-I.

Through these projects India also receives a share of the electricity generated .The collaboration has
been beneficial for both countries, with Bhutan earning revenue from the sale of electricity and India
receiving a reliable source of clean energy.