The World Bank's statement came after India and Pakistan concluded the secretary-level talks over the 1960 IWT this week, with the global lender maintaining that it was held in a spirit of "goodwill and cooperation".
"The parties have agreed to continue discussions and reconvene in September in Washington, DC," the World Bank said in a brief statement issued at the conclusion of the talks.
In the fact sheet issued yesterday, the global lender said Pakistan opposes the construction of the Kishanganga (330 megawatts) and Ratle (850 megawatts) hydroelectric power plants being built by India in Jammu and Kashmir.
Noting that the two countries disagree over whether the technical design features of the two hydroelectric plants contravene the treaty, the World Bank said the IWT designates these two rivers as well as the Indus as the "Western Rivers" to which Pakistan has unrestricted use.
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On the other hand, India had asked for the appointment of a neutral expert to look into the issues, contending the concerns Pakistan raised were "technical" ones.
The IWT was signed in 1960 after nine years of negotiations between India and Pakistan with the help of the World Bank, which is also a signatory.
The World Bank's role in relation to "differences" and "disputes" is limited to the designation of people to fulfil certain roles when requested by either or both of the parties, the fact sheet said.
Pakistan had approached the World Bank last year, raising concerns over the designs of two hydroelectricity projects located in Jammu and Kashmir.
It had demanded that the World Bank, which is the mediator between the two countries under the 57-year-old water distribution pact, set up a court of arbitration to look into its concerns.
The international lender had in November 2016 initiated two simultaneous processes for appointing neutral expert and establishing of a court of arbitration to look into technical differences between the two countries in connection with the projects.
After that, representatives of the World Bank held talks with India and Pakistan to find a way out separately.
The talks between the two nations over the treaty come amid tensions between them after a number of terror attacks in India by Pakistan-based terror groups.
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