Issuing a statement on Tuesday, the company said it decided to quit the project because of lack of viable power off-take option, lower demand electricity price forecasts, insufficient transmission capacity for power evacuation, and absence of necessary policies and regulatory framework for operationalizing power sales.
Sandip Shah, Statcraft's country director for Nepal, said increased bureaucratic hurdles for foreign investments, fragile political situation, and geo-political situation leading to a non-conducive project development environment were the other factors.
The company has already notified Investment Board Nepal about its decision to walk out from the project.
"Statkraft is still interested in further developments in Nepal, but projects need to demonstrate attractive returns on investment and stable long-term conditions in which to operate," the statement added.
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