The proposed IFC investment is expected to be supported by IDA20 PSW LCF through cross-currency swaps with IDA (“blended finance co-investments”). Through the IDA PSW LCF solution, IFC will be able to provide long-term local currency financing not readily available in the local market to support the Project. The financing package will enable BPC to implement its strategy for modernization of its transmission and distribution network to improve the reliability of its services and meet the growing demand of electricity in the country. Without LCF support, IFC will not be able to provide the required financing at viable rates to the client and the development impact associated with the Project will not materialize. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is estimated to be approximately 19 % of the total project cost of US$20.9 million. This estimate is based on the difference between (i) a “reference swap rate” and (ii) the “concessional swap rate” being received by the IDA PSW LCF. Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all of IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

At the project level, IFC’s financial support to the BPC 2025-2029 modernization plan will directly improve the performance of its distribution assets. Notably, the construction of the Pangbang Station will address the reliability of power in the Pangbang area for its 5,292 customers, who remain vulnerable to frequent power interruptions due to long-distance low voltage distribution lines passing through dense forests and adverse weather conditions. Furthermore, the establishment of the four regional DCCs (integrated into the central DCC) can enhance the reliability of power supply through integrating Advance Distribution Management System, which enables online monitoring of distribution activities across the key nodes in distribution system, with better detection and restoring capabilities for system faults. At the market level, IFC's investment will provide BPC with the necessary fundings to meet with the growing domestic electricity demand and to integrate the planned 1.9 GW of new generation capacity scheduled for commissioning between 2025 and 2029.

IFC will provide a long-term financing and cross-currency swap products not readily available in Bhutan. Furthermore, IFC’s upstream and advisory has engaged with the client since early 2024 through a programmatic approach, providing various capacity building initiatives. IFC will also provide guidance on E&S risks’ mitigation and management, in line with international best practice.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Duration of Power Outages (Saidi)	Hrs/day	SAIDI (hours per customer per year) of Bhutan overall.	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Frequency of Power Outages (Saifi)	Number	SAIFI (times per customer per year) of Bhutan overall.	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Smart meter coverage for LV	Percent		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Smart meter coverage for MV	Percent		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Board Composition Total (#)	number		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Direct Employment (#) Operations And Maintenance	individuals		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Female Direct Employment (#) Operations And Maintenance	individuals	to be added	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Female Direct Employment (#) Operations And Maintenance	individuals		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Number of Senior Management Positions	individuals	to be added	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Number of Senior Management Positions	individuals		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Number of Women In Senior Management	individuals	to be added	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Number of Women In Senior Management	individuals		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment

This is a Category B project as per IFC’s Policy on Environmental and Social Sustainability (2012) as the use of proceeds is limited to investments in assets that do not involve significant E&S risks. The key E&S issues include: (i) the company’s capacity to establish and maintain E&S management systems to identify, assess and manage E&S related risks in compliance with IFC PS and WBG EHS Guidelines; (ii) assurance of fair, safe and healthy working conditions for staff and contractors, including management of occupational health and safety (OHS) and gender based violence and harassment (GBVH) risks during construction and operations; (iii) resource efficiency and monitoring and management of waste, wastewater, and hazardous materials and (iv) community health and safety risks including life & fire safety risks and emergency preparedness and response.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.