Bitdeer Technologies is joining forces with Bhutan’s sovereign investment arm to establish a $500 million fund, aiming to tap the kingdom’s abundant hydroelectric power to develop carbon-free mining operations, the companies said in a joint statement on Wednesday.

Bitdeer to Build a 100-MW Mining Operation in Bhutan

Druk Holding and Investments (DHI), a sovereign investment arm of Bhutan, and publicly-listed crypto miner Bitdeer Technologies are looking to launch a $500 million closed-end fund to develop green crypto mining operations in the Himalayan kingdom. According to the press release, the fundraising process targeting institutional backers is set to begin at the end of May.

The companies say the fund’s primary goal is to establish a carbon-free digital mining project that would take advantage of Bhutan’s plentiful hydroelectric power resources. DHI’s CEO Ujjwal Deep Dahal believes crypto represents a low-risk opportunity for Bhutan to foray into crypto, adding the kingdom will initially focus on Bitcoin.

“It’s important for us to look at assets that are low volume, high value, or digital assets for that matter, and try to position ourselves in a way that we can be competitive globally over time to build our economy.”

– said Ujjwal Deep Dahal, CEO of DHI.

Bitdeer will set up a 100-megawatt operation in Bhutan as part of the deal. The construction of the mining facility is expected to start in Q2 and be completed from July through September. Founded in 2018 by crypto tycoon Jihan Wu, Bitdeer is a digital asset mining service provider that went public on the Nasdaq stock exchange last month through a $1.1 billion special acquisition purpose company (SPAC) merger.

DHI Confirms Reports About Crypto Exposure

The announcement of the new fund comes just a few days after DHI confirmed earlier reports that the investment arm has been mining Bitcoin for several years to diversify its portfolio. According to the April reports, DHI has held tens of millions of dollars in crypto funds without previously revealing it to the public.

DHI said it first showed interest in Bitcoin mining when the world’s biggest cryptocurrency was valued at about $5,000. The arm’s officials said risks tied to its crypto efforts are mitigated as the company does not directly trade cryptocurrencies.

DHI’s exposure to crypto raised concerns among some investors, given that the fund was primarily established to safeguard the country’s wealth and bring long-term value to its shareholders. The Forbes report also revealed that DHI borrowed $30 million from BlockFi, which the crypto lender claims it has failed to return. BlockFi filed for bankruptcy last year in the wake of the FTX collapse.

This article originally appeared on The Tokenist