Spain's ACS is withdrawing from the multibillion-dollar Inga 3 hydroelectric project in the Democratic Republic of Congo, the company said on Tuesday, dealing a further setback to plans to develop Africa's largest hydro plant.
A consortium led by Actividades de Construccion y Servicios signed a preliminary agreement with one led by China Three Gorges in 2018 to jointly develop the 11 000 MW project.
However, the two sides had been unable to agree on how to proceed to construction.
An ACS spokesperson told Reuters: "The ACS group will not participate in the execution of the project." He provided no explanation for the decision to withdraw.
The head of the government agency overseeing development of Inga 3, part of a planned series of dams along the Congo River that could eventually produce more than 40 000 MW, said Congo was awaiting formal notification of ACS's withdrawal.
It said however that the project would proceed.
"Let's wait and see. The important thing for me is that Inga has become a reality, and is attracting interest from many developers," Bruno Kapandji told Reuters.
The long-mooted project has been plagued by financing issues.
In 2016 the World Bank suspended tens of millions of dollars in funding, criticising Inga 3's "strategic direction" after the government assigned the portfolio to the president's office.
Elisabeth Caesens, director of Brussels-based advocacy group Resource Matters, said ACS had been on the fence for a while and did not want to commit extra money to such a risky investment.
"While ACS added weight to the ProInga consortium, it was not its driving force," Caesens said.
"We can expect the remaining Spanish company and the Chinese majors with which it has been asked to form a joint consortium to actively look for a more enthusiastic partner to integrate the team."
Resource Matters said in a report in October that Spanish company AEE Power was the more active player in the ProInga consortium with ACS.
In December, Congo President Felix Tshisekedi floated the idea of reverting to earlier plans to build Inga 3 with a 4 800-MW capacity, and gradually expand later.
Disagreements over the sequencing of the project and ownership stakes led to a breakdown in cooperation between the Chinese and Spanish consortia late last year.
Much of the output from Inga 3, which was expected to take eight years to build, has been earmarked for South Africa, with the rest going toward Congo's mining sector and population.