Overview
With a population slightly below 778,000, Bhutan successfully transitioned from Least Developed Country status as of December 2023.
Our partnership
The European Union is committed to assisting Bhutan in achieving sustainable and inclusive development, aligning with the United Nations 2030 Agenda, the Global Gateway Strategy, and the EU Indo-Pacific Strategy.
The partnership between the EU and Bhutan has been significantly strengthened through the signing of a Framework Agreement between the Royal Government of Bhutan and the European Investment Bank (EIB). This agreement paves the way for the EIB to offer sustainable financing for both physical and social infrastructure projects, responding to the needs identified by the Bhutanese government and its private sector counterparts.
The 13th Annual Consultations between the Royal Government of Bhutan and the EU, held in Thimphu on 22 April 2025, marked a constructive dialogue covering a wide range of topics, including governance and human rights, trade relations, sectoral cooperation, and various multilateral and regional issues.
The EU has allocated €31 million in grant funding to its partnership with Bhutan for the period 2021-2024 and a further EUR 17 million for the 2025-2027 period. Team Europe is now acting in Bhutan through a Framework loan from EIB to the Royal Government of Bhutan for mini-hydro power and solar energy development as well as a new EU guarantee in partnership with Finland to support the development of hazelnut production and commercialisation.
EU-Bhutanese partnership documents can be found in the 'Related documents' section below.
Our key initiatives
- Climate change and green growth
Bhutan and the EU are working together on sustainable agri-food systems, renewable energy, and creating a more circular Bhutanese economy. Specific actions include:
- Promoting inclusive, resilient and sustainable agri-food systems through budget support and guarantee instruments.
- Supporting sustainable tourism through the SWITCH-ASIA programme.
- Diversifying sources of renewable energy through an EIB framework loan.
- Good governance and civil society
The EU and Bhutan are decentralising Bhutanese governance while strengthening inclusive local-level governments. They are also building up the strength of civil society organisations and working hand-in-hand with them on human rights and justice.
- Digitalisation
The EU is providing technical assistance to help Bhutan’s digitalisation of public services, especially policies surrounding inclusive education. A special focus is being given to skills trainings for women and girls.
