Himachal secures key financial relief as ₹2,000 crore power component burden shifts to beneficiary states

State government breaks eight-year deadlock, secures power share worth over ₹1,000 crore annually

New Delhi: In a significant development for Himachal Pradesh, the Centre has agreed in principle to protect the state’s financial interests in the ₹15,624-crore Kishau Multipurpose Project, with the estimated ₹2,000-crore cost of the power component on Himachal’s side to be borne by beneficiary states receiving water from the project.

The agreement came as Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh, Delhi and Rajasthan signed a Memorandum of Understanding (MoU) in New Delhi on Tuesday for implementation of the 422 MW Kishau Multipurpose Project on the Tons River, along the border of Himachal Pradesh and Uttarakhand.

The MoU was signed in the presence of Union Home Minister Amit Shah. Union Jal Shakti Minister C.R. Patil and the Chief Ministers of the six participating states and Delhi signed the agreement.

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu said sustained efforts by the state government had helped resolve an eight-year-old deadlock over sharing the financial burden of the project.

He said that at a high-level meeting held on June 16, 2026, under the chairmanship of Union Home Minister Amit Shah, the Centre had agreed in principle that the estimated ₹2,000 crore cost of the power component attributable to Himachal Pradesh would be borne by the beneficiary states of the water component—Delhi, Rajasthan and Haryana.

According to Sukhu, the decision would prevent Himachal Pradesh from taking on an additional financial burden at a time when the state has limited resources.

The Chief Minister said the previous government had agreed to contribute around ₹800 crore as the state’s share, but the present government rejected the proposal in the larger interest of Himachal Pradesh.

State argued for financial parity

Sukhu said the state had strongly argued that the Centre is providing 90 per cent grant for the water component of the project and that similar consideration should be extended to the power component.

He also pointed out that people living in the project-affected areas of Himachal Pradesh would face displacement and that the state would bear a significant share of the social and environmental costs associated with the project.

“While the state is going to suffer maximum losses due to displacement, it would be unfair to additionally burden Himachal Pradesh financially,” the Chief Minister said, stressing that the state’s contribution to national development should be appropriately compensated.

Himachal to receive 1,000 million units of power annually

The agreement is also expected to provide a significant long-term financial benefit to Himachal Pradesh.

Sukhu said the state would receive 1,000 million units of electricity annually from the power component of the Kishau project. Once the project becomes operational, this power share is expected to be worth more than ₹1,000 crore annually, providing an important addition to the state’s financial resources.

The Chief Minister described the development as a major achievement for Himachal Pradesh, saying the government had consistently placed the interests of the state and its people above other considerations.

He said the resolution of the financial issue and securing the state’s legitimate power share represented a major victory in Himachal Pradesh’s efforts to protect its interests in major power projects.

The Kishau project, once implemented, is expected to serve the water and power requirements of the participating states while generating 422 MW of hydropower.