KATHMANDU, Nov 15: Nepal and India are expected to revive discussions on accelerating the long-delayed Pancheshwar Multipurpose Project during Prime Minister Balen Shah’s upcoming state visit to India, beginning November 22.
The proposed project is likely to be one of five key issues on the agenda for bilateral talks, according to government officials. Indian media have also quoted Uttarakhand Cabinet Minister Satpal Maharaj as confirming that the Pancheshwar project will be discussed during the Nepali prime minister’s visit.
APF border out post established at Pancheshwar
Preparations are underway in Uttarakhand for the proposed visit. Indian media, citing Minister Maharaj, reported that the discussions will also cover cross-border trade, infrastructure development, including a proposed dry port in Mahendranagar, and tourism promotion in Nepal’s Terai region.
Located on the Mahakali River, the Pancheshwar Multipurpose Project is one of the most significant joint infrastructure initiatives between Nepal and India. Despite its strategic importance, the project has made little progress over the past several decades due to disagreements over investment costs, water allocation and benefit-sharing.
The project was envisaged under the 1996 Mahakali Treaty, with the objectives of generating hydropower, providing irrigation facilities and controlling floods in both countries. Its implementation is expected to unlock substantial hydropower potential while strengthening bilateral cooperation in water resource development.
In recent years, both countries have stepped up efforts to finalize the project's Detailed Project Report (DPR). They have reportedly narrowed their differences over construction costs, with discussions indicating that Nepal would contribute around 25–30 percent of the total investment, while India would finance the remainder.
However, an agreement on sharing the benefits derived from the Mahakali River remains elusive. This unresolved issue continues to be a major obstacle to finalizing the project and moving towards implementation.
