Brazil’s electricity regulatory agency Aneel has recommended the cancellation of the contract to construct the 85 MW Murta hydroelectric facility.

The project was awarded back in 2001 to Murta Energetica in a public auction, but subsequent problems with environmental permissions has meant work on the plant has never started, according to Seenews.

Arcadis Logos Energia, the owner of Murta Energetica, is seeking $5m in compensation from the government for all the studies it has had to undertake for the project.

The Brazilian government has rejected the request.

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