With a population of less than a million people, Bhutan is known for its mountains, monasteries, and the thunder dragon (“druk”) featured in its flag. Its Sovereign Wealth Fund, Druk Holding & Investment (DHI), manages some of the country’s national champions and also invests in international securities and digital assets. We had the pleasure of speaking with its CEO, Mr. Ujjwal Deep Dahal, about the fund’s strategy and future objectives.

[GSWF] Druk Holding is relatively unknown in the world of SWFs – can you please provide a brief background on DHI and its role within Bhutan finances?

[DHI] DHI was established in 2007 by a Royal Charter by His Majesty the King and is fully owned by the Ministry of Finance. We operate at arm’s length with our own governance, and we invest and manage the wealth for the future generations of Bhutan. We contribute with about 40% to the country’s revenues via dividends and taxes, and 20% to its GDP, thanks to our 23 portfolio companies operating in energy, telecom, natural resources, etc.

[GSWF] Your portfolio is made up of 23 of Bhutan’s largest companies – were all portfolio companies profitable in 2023?

[DHI] DHI was transferred several assets when it was established to manage them efficiently. All these assets had and have a social mandate but are also commercial in nature. We have now expanded to other industries, although not all the companies are profitable.

[GSWF] DHI set up a subsidiary in Singapore. Do you also invest in financial markets (stocks and bonds) outside of Bhutan?

[DHI] DHI was inward-focused at first, which we feel we have managed to do well. The Singaporean branch was strategic to start our journey overseas and has invested in properties and other digital initiatives. We also invest in securities in the US, India, and Europe.

[GSWF] Can you please share what DHI is doing around investments in digital assets and other initiatives?

[DHI] At country level, we have invested in the foundational platform of digitization viz. optical fiber, and ADSS networks, 4G and 5G and also in a decentralized national digital identity on a self-sovereign Identity (SSI) framework using blockchain. We have partnered with Bitdeer for digital asset mining and launched the Metaverse named “Bhutanverse”- in Sandbox with a gallery encouraging artists, architects and creative minds to create art, games, NFTs and, importantly, digital experience in the Metaverse to experience Bhutan.

[GSWF] The fund’s is seeking investors for five opportunities in Bhutan – what is your ideal international partner?

[DHI] Yes, we are looking for credible international investors, with a growth mindset and building products and services of value with technology but at the same time very grounded in terms of sustainability. India has and will be our partner in developments and provides support in our development roadmaps as a strategic partner, but we are open to credible partners internationally in sectors to build the industry of the 21st century leveraging the exponential growth of technology. We aspire to invest with prudence in strategic sectors that provide opportunity in looking into the future in the strategic sectors.

[GSWF] Does DHI maintain strict ESG policies and practices? Can you tell us more about DHI’s social value and impact?

[DHI] The ESG component is very important to us, and we are looking at how to commit towards net zero eventually at company level across all industries. We are carbon negative as a country (-6 to -8 mil tons p.a.), but we need to look at it at the company level, too. CSR has a philanthropy angle, whether it is contributing with new fab-labs, a religious set-up, etc.

[GSWF] How many people does DHI employ at holding and group level? What do you think of Bhutan’s brain drain?

[DHI] Today, we employ 8,500 at group level and 150 at holding level. There have been cycles of brain drains like in any other emerging economy, but we are very focused on setting initiatives that could attract talent, e.g., the world’s third super fab-lab with MIT and the establishment of Research and Development platform and importantly the endeavor of DHI to create the “Innovation Ecosystem” in creating a Science Technology and Innovation economy.

[GSWF] Personally, you have been at the CEO position for almost a year now. What are your main goals for the next 3 to 5 years?

[DHI] Personally, I enjoy working with people with a positive mindset, who can collaborate, ideate, identify problems create solutions and importantly find opportunities to build values to societies. Through DHI we would like to use to exert positive change to build opportunities of the future. Day to day, I would like to be less engaged in operations and more on strategy.

We are working on five areas for investment in creating value to society:

  1. innovation and technology;

  2. energy and resources (100% hydro);

  3. digital assets;

  4. mining and minerals; and

  5. infrastructure, including digital, financial and physical infrastructure.

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