The company, which was issued the license on June 27, 1997 to construct the 750-MW project, had failed to manage funds for project despite 10 amendments to the agreement with the company over the last 14 years.[break]
The company had repeatedly been seeking extension and had last asked for a grace period to rope in investors on December 24, 2010, according to a press statement issued by the Ministry of Water Resources.
The company promoted by Australian company Snowy Mountain Engineering Corporation (SMEC) had banked on the Asian Development Bank (ADB) and China National Machinery and Equipment Import and Export Corporation (CMEC) for finances but both pulled out citing lack of good governance and investment-friendly environment in Nepal.
SMEC had invested over US$ 31 million in the project over the last decade as a major promoter but stopped funding office operations since August, 2010 after CMEC and ADB refused to invest in the project.
The project, estimated to be built at the cost around Rs 120 billion, had planned to export 90 percent of the power to India.
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