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Enron quits Nepal project

Enron has withdrawn from plans to build a 10,800MW hydro power plant in Nepal, it was announced in mid April.

US-based Enron had first proposed in 1996 to build a dam on Nepal’s Karnali river. The project was proposed on a build, operate, transfer basis: electricity from the plant would be transported via a new transmission line to be sold on to power-hungry India and China, and the plant would be transferred to Nepali owbnership after 50 years. The project was attractive to Nepal — whose installed capacity currently stands at around 300MW — because it would bring both extra capacity and foreign currency earnings. However the investment required was high — estimates range up to US$600 million — and up to now the project had not reached the survey stage. Enron withdrew its application for a survey licence, but said it would continue to monitor the power market and may reconsider the project at a later date.