An Australian consultancy, which won tax concessions to develop an LNG-fired power plant for Sri Lanka's state-run electricity grid, has announced it is pulling out of the project over differences in the project development.

Energy development and advisory company Arc Developments International revealed that it had been $quot;forced to withdraw$quot; from the project for the Ceylon Electricity Board (CEB), following $quot;an irretrievable breakdown in relations with the project developer.$quot;

Arc Developments has been involved in developing the 500MW combined cycle gas turbine power plant proposed for Kerawalapitiva for the past seven months, the company noted in a statement.

However, Arc director Paul McMahon has reportedly said it was not possible to attract funds for the project in its current state, and that the company was breaking off contact with local developer and sponsor Lanka Aloka AB.