Six years after signing of a MoU, China’s Three Gorges International (CTGI) decided to back off from the $1.2 West Seti Hydropower project in Nepal citing that the project is not cost effective reports The Indian Express.

Touted as the first reservoir project in Nepal, the 750-MW project was scheduled to be completed by 2019 as per the CTGI’s earliest commitment, but it pulled-out without even beginning construction, which may have an adverse impact on China’s credibility.

As per The Indian Express, Nepal had made an offer to lower the capacity to 600 MW from 750 MW at the same cost and extend the power purchase agreement to 12 years from 10 years. But China refused citing high costs for resettlement and rehabilitation of the people who would get displaced, and transmission costs.

Such a news might come as a welcome breather for India which ha been caught on the backfoot following China’s entrenchment into Nepal.

This concern was brought on following an announcement of the alliance between the two major communist parties of that country – the Khagda Prasad Sharma Oli-led Communist Party of Nepal (Unified Marxist Leninist) or CPN(UML) and the Pushpa Kamal Dahal-led Communist Party of Nepal (Maoist).

Also Read: India Caught On The Backfoot As China Entrenches Itself In Nepal