Nepal | July 06, 2020

Statkraft pulling out of 650MW Tamakoshi-3

Cites host of reasons for abandoning the $1.5bn project

Himalayan News Service
Share Now:

Photo: Statkraft

Kathmandu, January 12

Statkraft, Europe’s largest generator of renewable energy, has formally announced its decision to pull out of the 650-megawatt Tamakoshi-3 Hydroelectric Project, identifying the lack of viable power purchase option, lower electricity price forecast, insufficient transmission capacity and absence of necessary regulatory framework to implement Nepal-India power trade deal as deterrents.

The decision was taken after assessing all aspects of the project, including commercial, technical and regulatory, says a statement issued today by Statkraft.

“These factors include a lack of viable power offtake option, lower electricity price forecast, insufficient transmission capacity for power evacuation and absence of necessary policies and regulatory framework for operationalising power sales,” the statement quotes Sandip Shah, vice president and country director Nepal for Statkraft, as saying.

Other reasons for departure from the project, according to Shah, are: increased bureaucratic hurdles for foreign investment, a fragile political situation and a geo-political situation that has created a non-conducive project development environment.

Statkraft had obtained the survey licence for $1.5-billion Tamakoshi-3 Project in 2007 and has since conducted a feasibility study and Environmental and Social Impact Assessment of the project.

The peaking run-of-river project has the capacity to generate 2.43 terawatt-hour, or around 2.43 billion units, of electricity per year.

Initially, the project developer was intending to sell this electricity in Nepal — although it was sceptical about Nepal Electricity Authority’s ability to purchase all the power.

Amidst this uncertainty, the government signed Power Trade Agreement with India, which provided Nepal access to the vast Indian power market. This was encouraging news for Statkraft and the company had even started exploring the option of selling power in India.

But now it has finally decided to abandon the project and has formally notified the Investment Board Nepal, which was holding negotiations with Statkraft, about its decision.

Yet, Statkraft, in the statement issued today, has said ‘it is still interested in further developments in Nepal’. “But projects need to demonstrate attractive returns on investment and stable long-term conditions in which to operate,” adds the statement.

Statkraft has also said its departure from Tamakoshi-3 Project will not affect its other projects in Nepal and South Asia.

“As a majority stakeholder in Himal Power Ltd, Statkraft has a long-term commitment to Nepal, as the licence agreement for the 60MW 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 statement quotes Tima Utne Iyer, senior vice president at Statkraft and chairperson of Himal Power, as saying.

A version of this article appears in print on January 13, 2016 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Over 1,000 Nepalis return home on repatriation flights

KATHMANDU, JULY 4 Under the government’s evacuation schedule, a total of 1,082 migrant workers were repatriated today from five destinations. A total of seven flights were conducted today. Of them, Nepal Airlines Corporation (NAC) conducted three flights and Himalaya Airlines conducted two f Read More...

Bullion price slightly down in domestic market

KATHMANDU, JULY 4 Bullion price in the domestic market declined in the trading week between June 28 and July 3. According to the Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), gold was traded at Rs 91,300 per tola on Sunday and it remained constant on Monday. On Tuesd Read More...


NRNA, ILO forge partnership to help Nepali migrant workers

TEXAS: The Non-resident Nepalis Association (NRNA) has forged a partnership with the International Labour Organization (ILO) to help Nepali workers stranded in different parts of the globe due to the COVID-19 pandemic. Accordingly, the NRNA has received a financial assistance of 424,310 US dollar Read More...

Nepal's Covid-19 death-toll at 34, five fatalities recorded in the last six days

KATHMANDU: Nepal has recorded 34 coronavirus related fatalities so far with five deaths logged in the last six days. Nepal had recorded the first-ever death attributed to the contagion on May 14. A 29-year-old new mother from Bahrabise Municipality of Sindhupalchowk died with coronavirus. Mini Read More...

monsoon clouds

Constant downpour likely to cause rivers to surge later this week in Nepal

KATHMANDU: As monsoon begins to peak with downpour being a constant everyday feature in the past couple of weeks, people across various parts of the country are facing increased risk of floods and other season related disasters in the coming days. Meteorological Forecasting Division shared that t Read More...

'Decisive' talks between Oli-Dahal ongoing in Baluwatar

KATHMANDU: After wrapping up the meeting with President Bidya Devi Bhandari in Shital Niwas, co-chair of Nepal Communist Party (NCP) Pushpa Kamal Dahal has now reached the Prime Minister's official residence in Baluwatar. Dahal and PM KP Sharma Oli have now begun what is being observed as decisi Read More...

Crunch, crunch: Africa's locust outbreak is far from over

NAIROBI: The crunch of young locusts comes with nearly every step. The worst outbreak of the voracious insects in Kenya in 70 years is far from over, and their newest generation is now finding its wings for proper flight. The livelihoods of millions of already vulnerable people in East Africa ar Read More...

India to reopen Taj Mahal with social distancing, masks

NEW DELHI: Visitors to the Taj Mahal will have to wear masks at all times, keep their distance and not touch its glistening marble surfaces when India’s 17th-century monument to love reopens on Monday after a three-month COVID-19 shutdown. Only 5,000 tourists will be allowed in a day, split int Read More...