Bhutan is endowed with abundant natural and renewable energy resources. However, its mountainous terrain and the resulting difficulties in extending the grid have prevented a large percentage of the rural population from accessing clean energy.
At project appraisal in 2009, accessibility was a major development constraint in Bhutan. The road network provided inadequate connectivity and coverage. Travel between the east and west regions relied on either a single national highway in the north or on Indian road connections south of the Bhutan–India border.
Since embarking on a modernization process in 1961, Bhutan has faced increasing urban migration due to limited opportunities in the rural areas. If trends continue, close to half of the country’s population may reside in the urban centers by 2020, increasing the pressure on already strained urban infrastructure and services.
Bhutan, the only South Asian country with a surplus of power for export, generates almost 100% of its power from a network of perennially flowing rivers and streams.
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