Norway-based utility Statkraft has decided to withdraw itself from the Tamakoshi-3 (TA3) hydroelectric project in Nepal, due to various reasons; bureaucratic hurdles and lack of policies regarding power sales being the primary ones.
After examining all features of the project, such as commercial, technical and regulatory factors, The company has decided to quit the $1.5bn project and has notified its decision to the Investment Board of Nepal (IBN).
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In 2007, the Government of Nepal has awarded a license to Statkraft for undertaking a survey of the TA3 project, following which, the company completed a Feasibility Study and Environmental and Social Impact Assessment (ESIA) of the project.
According to the Integrated Nepal Power System (INPS) assessment, the run-of-river TA3 project, with an annual production of 2.43TWh of power, has the potential to supply power to India and other South Asian countries.
Statkraft Nepal VP and country director Sandip Shah said: "These factors include a lack of viable power offtake option, lower electricity price forecasts, insufficient transmission capacity for power evacuation and absence of necessary policies and regulatory framework for operationalizing power sales.
"It also reflects the increased bureaucratic hurdles for foreign investments, a fragile political situation and a geo-political situation leading to a non-conducive project development environment."
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By GlobalDataEven after its decision to pull out from the TA3 project, Statkraft expressed its willingness to work in profitable and easy-to-operate projects in Nepal.
In this regard, Statkraft Sr vice-president and Himal Power chairperson Tima Utne Iyer said: Himal Power (HPL), Statkraft has a long-term commitment to Nepal as the license agreement for the 60 MW Khimti hydropower plant runs until 2045.
"Our decision is purely linked to the Tamakoshi-3 Project and does not influence our activities in South Asia".
The electricity produced from the project is said to have covered the last year’s earthquake-hit districts of Dolakha and Ramechhap, repots Press TV.
