[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
dam-l POWER IN ASIA: More info on Enron's withdrawal from Nepal dam project
Enron KO's hydro scheme
from Power in Asia, 20 April 1998
Enron Corp. of the U.S. has decided to withdraw its application to build a
giant hydroelectric project on the Karnali River, once again spiking long
held ambitions by energy planners to develop the Karnali water basin in the
northwestern section of the remote Himalayan kingdom.
The ultimate size of the hydropower scheme would have been 10,800
megawatts, with much of the electricity to be exported to India. This
scheme even included a proposal to build transmission lines through
Himalayan Mountain passes to serve southwestern China's Tibet region.
Observers said, however, that the project seemed far fetched, both given
its scale and the fact that Enron's area of expertise is in gas fired power
generation, particularly LNG. The proposed power lines to China were
technically difficult and the end-markets served is notably lacking in
population.
Those close to Enron, said however, that the project made sense given that
Enron's scale and financial clout could have enabled it to mobilize
subcontracting help. Further, its ties with India are becoming more
important given the progress on the trailblazing Dabhol Power Project in
Maharashtra state.
The Nepal hydro scheme would have been part of a large picture aimed at
securing Enron's long-term involvement in providing power to Asia's second
largest -- and largely underdeveloped -- energy markets. It would have
been built under a BOT scheme, with the plant being handed back to Nepal in
50 years.
Nepal, with a population of just 22 million people, would not have been
enough to provide significant revenue for such a private-sector
undertaking, despite the fact that only 15 percent of the people have
access to electricity. Most of the population is at the other end of the
country, near the site of the aborted $1 billion Arun III project that was
to have been funded by the World Bank ($175 M.) but was dropped after
environmental objections and a re-evaluation of its economics.
News of the withdrawal by Enron's Renewable Energy Corp. came in the form
of an announcement by Nepal's Water Resources Ministry. "They have
withdrawn their application for a survey license," said a ministry
official. But he added that Enron would continue to monitor the power
market and might reconsider at a later date.
The official quoted Enron as saying that "after reviewing the power and
financial market... we withdraw our application for survey license."
Enron reinforced its concern with a statement that the regional market for
electricity "may be insufficient at this time for us to continue our
development efforts."
The cancellation is a blow to Nepal, which is anxious to boost its tourism
and to attract more light manufacturing, for which stable electricity
supplies are needed.
Its hydroelectric potential, which is always eyed enviously by India,
stands at 83,000 megawatts. Some projects have got underway; last year
Australia's Snowy Mountain Engineering Corp. was given the government
commitment to allow it to build a $1 billion, 750 megawatt dam on the West
Seti River. The number of other smaller hydropower projects are being
supported by the Asian Development Bank.
===============================
Susanne Wong
Campaigns Assistant
International Rivers Network
1847 Berkeley Way
Berkeley, CA 94703
Tel: 1.510.848.1155 ext 316
Fax: 1.510.848.1008
email: swong@irn.org
web: www.irn.org