Following the meeting between Indian Prime Minister Narendra Modi and Nepal Prime Minister Sushil Koirala during Prime Minister Modi's state visit to Kathmandu in August, a project that has waited in the pipeline for 17 years saw new developments.

Nepal and India agreed to resume the Pancheshwar Multipurpose Project, a bilateral project signed in 1996, by endorsing the charter creating the Pancheshwar Development Authority. This move sparks hope that the bi-national hydropower project—to be developed in Mahakali River bordering Nepal and India—will finally be implemented. This project is expected to generate 6,720 MW energy, and irrigate 93,000 hectares of land in Nepal and 1.6 million hectares in India.

The project authority will work according to terms of reference exchanged by the two countries during Prime Minister Modi's visit. Drafting a detailed project report (DPR) will be the authority's initial task. Once finalized, cost and benefits of the project will be analyzed for financial closure, and construction will follow. Officials of India and Nepal aim to complete the DPR in the next 6-12 months.

Early this month, the two countries inked a landmark Power Trade Agreement (PTA) that allows bilateral trade of electricity between India and Nepal. This PTA is foreseen to boost the two countries' energy security and raise revenues for Nepal's economy.

Related Links:

• Pancheshwar Multipurpose Project 
• Nepal, India approve charter of 6,720 MW Pancheshwar project