Statkraft backs out of 650-MW Tamakoshi 3 hydropower project

Nepal Map

Norwegian utility Statkraft has cease development of the 650-MW Tamakoshi 3 hydroelectric plant, according to a notification sent to the Investment Board of Nepal earlier this week.

“These factors include a lack of viable power off-take options, lower electricity price forecasts, insufficient transmission capacity for power evacuation, and an absence of necessary policies and regulatory framework for operationalizing power sales” said Sandip Shah, Statkraft Vice President and Country Director for Nepal.

Statkraft entered an agreement with the Nepalese government in 2007 to build the US$1.5 billion plant, and had since completed feasibility studies, and environmental and social impact assessments.

Much of the power generated by Tamakoshi 3 would have been exported to India and other neighboring countries, though uncertainty about those arrangements contributed to Statkraft’s decision as well.

“It also reflects the increase bureaucratic hurdles for foreign investments, a fragile political situation and a geo-political situation leading to a non-conducive project development environment,” Shah said.

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