Norwegian energy giant Statkraft AS has withdrawn its plan to build a hydropower project in Nepal, officials said yesterday, in a blow to the Himalayan nation's efforts to woo foreign investment and lift its struggling economy. The company was to invest $1.5 billion in the Tamakoshi III plant to generate 650 megawatts for export to energy-hungry India, which has an agreement with Nepal to buy electricity to help cover its own supply shortages. Ghanashyam Ojha, external affairs chief with the Investment Board Nepal (IBN), said the Norwegian firm withdrew because it was not sure it could send the power to markets in India, as necessary cross-border transmission lines are not in place yet. Nepal is estimated to have the potential to generate more than 42,000 megawatts of electricity, but has installed capacity of just over 800 MW and has daily power cuts for up to 15 hours.
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Research Associate at Center for Islam and Global Affairs (CIGA) at Istanbul Sabahattin Zaim University