SANTIAGO, Chile 6/11/12 (PennWell) -- Chilean power company Colbun is denying reports that it is planning to unload part of its holding in the country's 2,750-MW HidroAysen hydropower project, HydroWorld.com has learned.

Colbun announced that it had essentially stopped HidroAysen's development from progressing by suspending studies associated with the project's transmission line a week ago, citing a lack of governmental support for the project.

Since then, local media has speculated that Colbun was looking to divest part or all of its current 49% interest in the project, and although the company has denied these reports, it has said it might be willing to modify its share if it would help the project progress through Chile's securities regulator.

The HidroAysen project would entail the construction of five dams on the Baker and Pascua rivers, with a 2,000 km transmission line to bring the power from the generating sites to Santiago.

Proponents argue the project could save Chile millions in reduced energy imports, although it has faced stiff opposition due to its possible environmental impacts.