𝐁𝐡𝐮𝐭𝐚𝐧 𝐒𝐞𝐭𝐬 𝐁𝐨𝐥𝐝 𝐆𝐨𝐚𝐥 𝐓𝐨 𝐌𝐨𝐛𝐢𝐥𝐢𝐳𝐞 $𝟏𝟒 𝐁𝐢𝐥𝐥𝐢𝐨𝐧 𝐅𝐨𝐫 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 𝐂𝐡𝐚𝐧𝐠𝐞 𝐀𝐝𝐚𝐩𝐭𝐚𝐭𝐢𝐨𝐧

…𝒕𝒉𝒆 𝒏𝒂𝒕𝒊𝒐𝒏𝒂𝒍 𝒂𝒅𝒂𝒑𝒕𝒂𝒕𝒊𝒐𝒏 𝒑𝒍𝒂𝒏 𝒑𝒓𝒊𝒐𝒓𝒊𝒕𝒊𝒛𝒆𝒔 𝒕𝒉𝒆 𝒘𝒂𝒕𝒆𝒓 𝒔𝒆𝒄𝒕𝒐𝒓, 𝒘𝒊𝒕𝒉 𝒂 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒊𝒄 𝒊𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕 𝒑𝒍𝒂𝒏 𝒃𝒂𝒄𝒌𝒆𝒅 𝒃𝒚 𝑨𝑫𝑩 𝒂𝒊𝒎𝒆𝒅 𝒂𝒕 𝒆𝒏𝒉𝒂𝒏𝒄𝒊𝒏𝒈 𝒓𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒆 𝒂𝒏𝒅 𝒔𝒖𝒔𝒕𝒂𝒊𝒏𝒂𝒃𝒊𝒍𝒊𝒕𝒚 𝒂𝒄𝒓𝒐𝒔𝒔 𝒎𝒖𝒍𝒕𝒊𝒑𝒍𝒆 𝒔𝒆𝒄𝒕𝒐𝒓𝒔.

By Zhenphen chokden

With the launch of the National Adaptation Plan (NAP 2023), Bhutan has set an ambitious target to mobilize USD 14 billion to address climate change impacts across seven key priority sectors: water, agriculture and livestock, forests and biodiversity, human settlements and climate-resilient cities, health, energy, and climate services and disaster risk reduction. Recognizing the cross-sectoral and multi-faceted nature of water, the Royal Government of Bhutan has prioritized the Water Sector as a key area in its climate adaptation strategy.

With support from the Asian Development Bank (ADB), the Department of Water is driving the development of the Climate Adaptation Investment Plan (CAIP) for the Water Sector. This plan will require USD 830 million (over Nu 71 billion) to cover 11 strategic investment packages, designed to enhance resilience and sustainability under the changing climate. The packages integrate nature-based solutions and advanced technological interventions to address primary risks.

The investment attraction was showcased at a high-level Investment Dialogue on March 20, 2025, in Thimphu. The event convened top stakeholders, including government agencies, international representatives, private sector firms, financial institutions, and civil society organizations. The platform provided an opportunity to exchange views on financing possibilities and consolidate partnerships for the implementation of the CAIP. The plan offers both programmatic and strategic investment strategies, ranging from individual projects to an overarching framework.

The strategy is grounded in an analysis of Bhutan’s context, including relevant planning and finance structures. Climate risk assessments follow, leading to the development of a strategic climate diagnostic. This process culminates in the ranking of adaptation packages by urgency, assessing their economic and financial viability, and identifying financing opportunities from various sources.

Nanki Kaur, ADB Senior Climate Change Specialist, emphasized the variety of investment packages. “Our packages include nature-based solutions like spring-shed management, river basin restoration, and afforestation to enhance water supply resilience. Additionally, we have decision-support tools, early warning systems, and climate information services to strengthen preparedness and response mechanisms,” she explained. The 11 investment packages encompass a wide range of initiatives, including water and disaster management, forests, hydropower, agriculture, research, and policy. Eight of these packages have articulated climate adaptation objectives, while the remaining three are crucial to the Water Sector and offer significant adaptation co-benefits.

These investments are to be undertaken by the end of the current Five-Year Plan, with scope for continuation into the next planning phase. This gradual approach ensures that both short-term and long-term adaptation efforts are addressed, helping Bhutan combat national vulnerabilities to climate change.

The Investment Dialogue generated significant interest from stakeholders such as the Japan International Cooperation Agency (JICA), the United Nations Development Programme (UNDP), Bhutan Chamber of Commerce and Industry (BCCI), and the Ministry of Finance. Participants identified the dual benefits of the investment packages, emphasizing environmental sustainability and a return on investment.

Tenzin Khorlo, Chair of Bhutan’s Water Sector Adaptation Investment Plan, highlighted the importance of prioritizing water-related projects. “Water is a cross-cutting sector that impacts all aspects of life and the economy. By addressing water, we can achieve significant co-benefits in other priority sectors like agriculture, energy, and disaster risk reduction. We hope to create a sustainable funding model using both public and private sector finance,” he stated.

While private investment will play a crucial role, the Royal Government of Bhutan has committed to contributing to the funding pool. The government’s involvement stresses the urgency for action on climate change and the need for collaborative multi-stakeholder efforts to finance adaptation. The ADB TA-6933 draft CAIP is in its final stages, with stakeholder comments to be incorporated before its completion in June 2025. Upon approval, the plan will serve as the roadmap for Bhutan’s climate adaptation strategy and unlock transformative projects aimed at preserving the nation’s natural resources and ensuring sustainable development.

The CAIP is a critical step toward building resilience and securing Bhutan’s future as it faces the impacts of climate change. The government and its stakeholders are urging local and international investors to seize the opportunity to be part of this initiative, which promises not only environmental dividends but also economic returns.

With its innovative approach combining nature-based solutions and advanced technologies, Bhutan’s Climate Adaptation Investment Plan for the Water Sector stands as a model for other nations facing similar challenges. The success of this program will ultimately depend on the collaborative efforts of all stakeholders, working together to turn the vision of a climate-resilient Bhutan into reality.