March 12, 2009 (LBO) – An Australian consultancy that won tax concessions to develop a liquefied natural gas (LNG) fired power plant for Sri Lanka’s state-run electricity grid has announced it was pulling out of the project. “As a result, Arc has unequivocally withdrawn from the project in its present format, and has absolutely no further connection or association with Lanka Aloka AB or any of the project’s other stakeholders.”
Arc’s role has been to lead the project development and to introduce potential equity investors and commercial lenders to the initiative, McMahon said.
“A critical responsibility has been to ensure the project was financially structured in a way which ensured it was attractive both to investors and Sri Lankan stakeholders.
“Regrettably, the present project parameters have rendered attracting international investment and borrowings unachievable,” McMahon said.
McMahon said Arc’s decision to sever ties with the development was only reached after extensive negotiations and discussion.
“Arc believes this project has enormous potential, and the current situation is extremely disappointing for the industry and for Sri Lanka, McMahon said.
“Based on potential viability