The correct answer is option 'C' - Panna Tiger Reserve.

Explanation:
The Ken-Betwa interlinking project is a major river interlinking project in India. It aims to transfer surplus water from the Ken River in Madhya Pradesh to the Betwa River in Uttar Pradesh, with the primary objective of meeting the water needs of the drought-prone Bundelkhand region.

The project involves the construction of a dam on the Ken River, which will create a reservoir called the Daudhan Dam. This reservoir will provide water to the Betwa River through a canal system, thus ensuring water availability in the Betwa River basin.

Panna Tiger Reserve, located in the Panna and Chhatarpur districts of Madhya Pradesh, falls under the area where the Ken-Betwa interlinking project is being implemented. This tiger reserve is spread across an area of approximately 542.67 square kilometers and is known for its rich biodiversity, including a significant tiger population.

The implementation of the Ken-Betwa interlinking project in the vicinity of Panna Tiger Reserve raises concerns about the potential impact on the wildlife and ecosystem of the reserve. The construction of the dam and the canal system may lead to habitat fragmentation, disturbance to wildlife, and changes in the water flow dynamics of the Ken River.

To mitigate these concerns, the project authorities are required to undertake environmental impact assessments and implement suitable measures to minimize the negative impacts on the tiger reserve. These measures may include the creation of wildlife corridors, relocation of villages, and proper management of the water flow to ensure the sustenance of the ecosystem.

Overall, the Ken-Betwa interlinking project is a significant infrastructure undertaking aimed at improving water availability in the Bundelkhand region. However, it also poses challenges in terms of balancing development and conservation, particularly in the context of protected areas like the Panna Tiger Reserve.