Nepal-India official dialogue silent on landmark Pancheshwar project

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Last Updated01/03/2024

India and Nepal signed the agreement on long-term power sharing but have not managed to make any forward movement on the stalled negotiations over the landmark Pancheshwar Multipurpose Project (PMP).

After the Joint Commission Meeting, the two Ministers witnessed the exchange of an agreement between the two governments on long-term electricity trade.
The agreement aims to increase export of Nepali power to India to the level of 10,000 MW over a period of 10 years.
However, the Pancheshwar Multipurpose Project is aimed at generating around 6,480 MW energy (to be divided equally between two sides)
- Along with water for irrigation of 130,000 hectares of land in Nepal and 240,000 hectares of Indian territory, respectively.
While electricity is divided equally, India gets the lion’s share of irrigation and flood control benefits.
On the other hand, Kathmandu feels water is ‘white gold’ and India should pay Nepal for it.

It is a bi-national project between India and Nepal, aimed primarily at energy production and enhancing irrigation in both countries.
It involves the construction of a 315-meter high dam across the River Mahakali (Sarada in India).
It forms an 80 km long reservoir with a surface area of 116 km square and a total gross storage volume of about 11.35 billion cubic meters.
This project underscores the progress of the Mahakali Treaty signed in February 1996 between India and Nepal
- And includes provisions for the integrated development of the Mahakali River basin.