US company Enron has abandoned a project to construct a 10 800 MW hydropower project in Nepal. The company has asked to withdraw its survey licence application, Dow Jones reports. It had reached the stage where it had to decide whether to commit itself to development efforts, a spokeswoman said.

The decision to withdraw was tied to a perception that the demand for power in both India and China, two countries from which power from the plant would have been exported, was not as high as anticipated. Forecasts predict slower growth in China, following the recent currency crisis in parts of southeast Asia. Enron may decide to revisit the scheme in the future, if demand picks up again.

The scheme, on the Karnali River, involved construction of a power plant and a reservoir 600 km west of Katmandu. It was expected to cost around $9 billion. Power from the plant was intended for export.

Nepal, which has extensive untapped hydropower reserves, has been trying to develop power export projects. The Enron scheme was expected to boost gross national product by 43 per cent and increase export revenue eleven times, according to one source.

Enron already has several power projects underway in Asia, including the 826 MW Dabhol power plant in Maharashtra, India, which is expected to start operating later this year.