Himachal Pradesh Secures Landmark Deal For Long Pending Kishau Multipurpose Dam Project

Shimla : The decades-old draft agreement on the massive 422 MW Kishau multipurpose hydroelectric project is finally inching closer to reality. After an eight-year political deadlock, the Central Government has officially circulated a revised draft Memorandum of Understanding (MoU) to partner states, clearing the path for an upcoming signing ceremony in the presence of Prime Minister Narendra Modi.

 Reviewing the draft on Tuesday, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu confirmed that the state successfully renegotiated its terms to safeguard local interests. Under the previous proposal, Himachal Pradesh was expected to contribute nearly ₹800 crore toward capital costs. However, citing critical fiscal constraints, the state government firmly rejected those terms.

 The newly established consensus provides a major financial breakthrough: Himachal Pradesh is entirely relieved of capital investment liabilities while retaining rights to project benefits. Instead, the state will generate a massive ₹600 crore in annual revenue through the power component.

Furthermore, Himachal has secured 378 million cubic metres of water rights in the Yamuna basin.  In a unique swap agreement, Himachal’s share of water will be routed to water-stressed regions in Delhi and Rajasthan. In exchange, these beneficiary states will absorb Himachal’s portion of the power generation costs.

The broader 90:10 funding framework ensures the Central Government finances 90% of the water component.  Straddling the border of Himachal and Uttarakhand on the Tons River, the gravity dam project will drastically improve irrigation, provide clean energy, and rejuvenate the Yamuna basin.

The draft will head to the Union Cabinet for final execution approval once the MoU is formally signed.  Key Information:DetailSpecificationCapacity422 MW (Hydro-power component)LocationTons River (Border of Sirmour, HP & Dehradun, UK)HP Financial Input₹0 (Completely Waived)HP Annual RevenueApprox. ₹600 CroreHP Water Share378 Million Cubic Metres