While one of the deceased hailed from Kerala, another was from Nepal, Kinnaur Superintendent of Police Rahul Nath said.
The blast occurred in the morning when an engineer was inspecting a dynamite installed to carry out a blast.
The injured have been hospitalised.
The project in Kinnaur, about 300 km from the state capital, is being executed by Himachal PradeshPower Corporation Limited (HPPCL).
A case has been registered, police said.
In June this year, three engineers were killed while fixing a new turbine at the 2-MW Rongtong hydroelectric plant near Kaza town in Lahaul-Spiti district.
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