DHI proposes AI Data Center powered entirely by renewable energy

2026-02-16 - 07:57

At the Invest Bhutan Summit, Druk Holding & Investments (DHI) presented its proposal for the establishment of a large-scale, AI-ready data center in Bhutan, positioning the project as a strategic investment aligned with the country’s renewable energy strengths, and emerging role in digital infrastructure. The proposed AI Data Center is designed to be powered entirely by renewable hydropower and will provide GPU colocation and cloud-based AI computing services to international clients and governments. By leveraging Bhutan’s renewable energy capacity and favorable natural climate conditions, the project aims to support advanced AI computing and data infrastructure services while ensuring sustainability and energy efficiency. The total project investment has been estimated at approximately Nu 904 million, equivalent to USD 10 million, per megawatt. This capital intensity of USD 10 million per MW reflects the scale and technical requirements of establishing AI-ready infrastructure capable of supporting high-performance computing workloads. The project’s financial outlook projects an internal rate of return ranging between 5 and 18 percent, with revenue expected to be generated through a GPU-as-a-Service and colocation business model. From a market perspective, the project is positioned to serve the rapidly expanding global AI computing infrastructure market, which is growing at over 33 percent annually. The target users for the facility include international and regional clients that require advanced AI computing services, placing Bhutan within a competitive global ecosystem for data and AI infrastructure. The proposal also situates the project within Bhutan’s broader energy context. Bhutan currently has an installed renewable energy capacity of 3,490 megawatts, with an additional 2,081 megawatts under construction. Looking ahead, there are plans to add 20,000 megawatts of hydropower and solar capacity by 2040, providing a long-term energy foundation to support power-intensive digital infrastructure projects such as AI data centers. While the investment opportunity is positioned as compelling, key risks have also been identified. These include seasonal power deficits during the dry winter months, as well as potential gaps in latency performance and technical expertise. Despite these challenges, the project is presented as investable due to its reliance on renewable-energy-powered digital infrastructure, its alignment with rising global demand for AI computing, and its strategic use of Bhutan’s energy resources. The project will also have access to fiuscal incentives whereby they will be exempt from tax and customs under the Fiscal Incentives Act 2021 for ICT and digital infrastructure. The DHI CEO Ujjwal Deep Dahal also talked about the “innovation strategy” . The innovation strategy – is available in the DHI 10X Journey document. The R&D center of Excellence of the DHI 10X- one of the major pillars of the R&D Economy is creation of AI and Robotics as a national sovereign infrastructure, creating a CONTEXT SML/LLM of Bhutan to ensure that the AI age and the AI Economy reflects the context of small economies and countries as Bhutan builds a sovereign National AI Compute infrastructure.