SaskPower is pausing its development of the Tazi Twé hydroelectric project near Black Lake, Sask. due to a decline in the projected demand for power in the region.

"We have decided not to proceed with construction until there is a viable business case for this project, which is largely dependent on economic activity in northern Saskatchewan," SaskPower president Mike Marsh said.

Demand for power was projected to grow at a rate of four to five per cent annually in northern Saskatchewan. Those predictions were recently decreased to one to two per cent per year.

In the fall of 2015, nearly two-thirds of the band members who voted said "yes" to going ahead with the project. It was set to add 50 megawatts of power to the provincial grid and would have been the first new hydro project in the province in more than 30 years.

About 1,600 people live in the remote community, which is 100 kilometres south of the border between Saskatchewan and the N.W.T.

SaskPower said it can continue to meet demand in the area with its current infrastructure.

The Crown corporation said it has invested $34 million in the project over the past five years in studies and project development.

The proposed $630-million water diversion project would have been a partnership between the community and SaskPower, the province's electrical utility.

The project had initially been expected to begin construction by late 2016 or 2017.