Major hydropower project in Nepal stopped

2016-01-13 20:01

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Kathmandu - A Norwegian company has announced its decision to "discontinue" the development of a major hydropower plant in Nepal in the face of a prolonged political impasse in the Himalayan country, the company said on Wednesday.

The company, Statkraft, said it was facing increased bureaucratic hassles and a fragile political situation.

"We made a presentation to the Nepal Investment Board, and we were asked to reconsider or to downsize so that the project could still run," Sandip Shah, vice president and country director for Statkraft, told dpa.

"There aren't viable options for us to continue [the] Tamakoshi-3 [hydropower plant] at the moment, but if there are other projects that seem like sound and viable options, we would explore [them]," he said.

Statkraft said the decision had been taken after a thorough assessment of all the aspects of the project, and that its development partner in Nepal, the investment board, had been informed.

Lower electricity price forecasts, insufficient transmission capacity and an absence of the necessary policies and regulatory framework were cited among the major factors leading to the withdrawal.

The decision has dealt a blow to Nepal which is facing massive power cuts. Tamakoshi-3 was expected to generate 650MW of electricity at an estimated cost of $1.5bn.

Statkraft, which came into operation in Nepal in 2007, had completed the groundwork for the project and already invested $13m in it.

Read more on:    norway  |  nepal  |  energy

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