New Delhi, Feb 9 (IANS): Prime Minister Narendra Modi and Afghanistan President Ashraf Ghani on Tuesday signed an agreement to build the $290 million worth Shahtoot dam to provide clean drinking water to around two million people in Kabul.

Official sources said the deal was signed by Minister of External Affairs S Jaishankar and his Afghan counterpart in a virtual meeting between Modi and Ghani on Tuesday afternoon.

Since 2001, when the US overthrew the Taliban regime following 9/11 terror attacks and the subsequent war on terrorism, India has been engaged in development projects in Afghanistan. India has so far, spent around $3 billion on over 400 development projects across Afghanistan.

During the video conference, the two leaders reiterated that it was necessary to have a terror-free environment and peace in the region. Ghani agreed with Modi saying that a sovereign and united Afghanistan is essential for the stability and prosperity of South Asia. Peace, he said, is the central desire of Afghan people but it must be the peace that ends violence and not a preface to another tragedy.

The Ghani government is engaged in a dialogue with the Taliban, following the peace agreement between the Islamist group and the US last year. India, has historically stayed away from Taliban, given the outfit's extremism and closeness to Pakistan.

At the virtual meeting, said, "Unity within Afghanistan is important. I am confident that a united Afghanistan is capable of dealing with any challenge."

Ghani said that India is a true partner in Afghanistan's development and no external force will be able to stop Afghanistan's development and friendship with India. "India's development assistance to Afghanistan is marked on our landscape," he added.

While expressing concern over escalation in violence in Afghanistan, Modi extended his support to comprehensive ceasefire in Afghanistan. He also conveyed his pleasure at the signing of the deal for Shahtoot dam, which will provide water for drinking as well as irrigation in Afghanistan's capital. The dam will be built on the Maidan river tributary of Kabul river.

Though Islamabad has been complaining that it would reduce water flow into Pakistan, Afghanistan and India have been talking about the dam project for last several years.

Ghani thanked Modi for the Shahtoot reservoir and the Covid-19 vaccines. India is assisting Afghanistan with Covid-19 vaccines manufactured at the Serum Institute of Pune. The government gifted half a million doses of the vaccine on Sunday. India had earlier gifted more than 20 MT of Covid-19 medicines and extended humanitarian assistance of 75,000 MT of wheat through Chabahar Port to strengthen food security of Afghanistan.