NEW DELHI | July 11, 2025 — In a significant move aimed at accelerating energy infrastructure development and enhancing water resource management in the region, the Government of India is seeking a term loan of ₹3,119 crore to fast-track the construction of the Kwar Hydro Electric Project on the Chenab River in Kishtwar, Jammu & Kashmir.
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The Kwar Dam, a greenfield storage-type hydropower project, is being executed by Chenab Valley Power Projects Limited (CVPPL)—a joint venture between NHPC Limited and the Jammu & Kashmir State Power Development Corporation Limited. The project, with a total estimated cost of ₹4,526 crore, is expected to generate 540 MW of power upon completion.
The CVPPL has invited competitive interest rate bids from leading financial institutions and banks to secure the ₹3,119 crore term loan, which will partially finance the project. The dam, strategically located on the Chenab River, is also viewed as geopolitically significant in light of India’s recent pause on the Indus Waters Treaty.
Construction Milestones Achieved
One of the most critical milestones—the diversion of the Chenab River—was successfully completed in January 2024. This pivotal achievement cleared the way for the commencement of the main dam works, which are currently progressing at pace. The excavation of the 609-metre-long Main Access Tunnel has also begun, marking yet another step forward in the project’s execution.
"The river diversion marks a turning point in the development of any hydroelectric project," said an official associated with the development. "It enables the start of foundational dam work and sets the stage for full-scale construction activities."
Project Scope and Impact
Located approximately 28 kilometers from Kishtwar town, the Kwar project involves the construction of a 109-metre-high concrete gravity dam. Once operational, the project is expected to produce an annual energy output of 1,975 million units (MU), significantly improving electricity availability in the region.
Prime Minister Narendra Modi laid the foundation stone of the project on April 24, 2022. The government has reiterated its commitment to meeting critical construction milestones to ensure the project’s timely completion by 2027.
In addition to bolstering regional energy security, the Kwar project is expected to catalyze industrial growth—particularly in Jammu & Kashmir—while contributing to India’s broader renewable energy targets and strengthening the country's strategic control over Himalayan river systems.
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