Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Energy, Water Resources and Irrigation Minister Deepak Khadka has confirmed that the government is making serious preparations to move forward with the long-stalled Pancheshwar Multipurpose Project, a bi-national hydropower initiative between Nepal and India. The push comes ahead of Prime Minister K.P. Sharma Oli’s official visit to India, scheduled for Bhadra 31 (mid-September).
Speaking at a press conference organized by the Press Union Kailali in Dhangadhi on Tuesday, Minister Khadka stated that the Ministry is actively preparing groundwork to reach a “mutually beneficial agreement” with India on the Pancheshwar project during the Prime Minister’s visit.
“Although it’s been over 20 years since Nepal and India signed an agreement on Pancheshwar, the project hasn’t moved forward. This delay has already cost Nepal over Rs. 100 billion in lost opportunity,” said Minister Khadka. “Our efforts are now focused on resolving outstanding issues during the PM’s India visit to finally unlock progress.”
Pancheshwar Project Stuck in Diplomatic Limbo for Two Decades
The Pancheshwar project, envisioned as a major multipurpose development on the Mahakali River along the Nepal-India border, was part of the 1996 Mahakali Treaty. Despite being one of the most ambitious cross-border energy projects—with a proposed generation capacity of over 6,000 megawatts—progress has been stagnant due to prolonged disputes on design parameters, benefit-sharing, and dam height.
Minister Khadka emphasized that the Ministry is actively working to finalize negotiation positions in a way that protects Nepal’s national interest while also ensuring win-win cooperation with India.
Long-Awaited PM Visit Seen as Strategic Opportunity
The upcoming India visit by Prime Minister Oli is being seen as a diplomatic window to reignite high-level political commitment toward cross-border hydropower cooperation.
According to Minister Khadka, the Pancheshwar issue will be among the top agenda items during bilateral discussions. “We are working so that unresolved issues regarding Pancheshwar can be finalized during this visit,” he said.
Barriers in Nepal’s Energy Sector
Minister Khadka also pointed out that Nepal’s hydropower sector holds vast potential but continues to face institutional, financial, and legal bottlenecks, which have prevented progress in projects like West Seti and other strategic assets in the Far-Western region.
“Despite enormous resources, we haven’t been able to fully utilize them due to a lack of financing, infrastructure readiness, and unresolved legal complexities,” he noted.
The Ministry is planning additional reform measures to improve cross-border coordination, attract foreign investment, and remove procedural delays in strategic hydropower ventures. The outcome of the Prime Minister’s India visit is expected to be a key turning point for regional energy integration and long-stalled bilateral projects.
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