Norwegian company Statkraft has pulled out of the 650 MW Tamakoshi III Hydropower Project just as it was about to discuss the project development agreements (PDA) with the Investment Board Nepal (IBN).

Statkraft said that the decision to pull out of the project was due to its own internal policy and the situation of the country. It has informed the IBN of its decision to pull out of the project.

The company had already signed a project negotiation agreement (PNA) with IBN. It has also spent Rs one billion for the survey of the project after receiving the survey license from the government in March 2007.

Sources said that the major concern for the company was finding a market for its electricity. It was planning to sell electricity to India as a power trade agreement (PTA) was sealed with India. But following the unofficial blockade imposed by India upon Nepal and the uneasy relation between Nepal and India, it was doubtful that India would be the market for its electricity.