The Solar Power Producers’ Association, Nepal (SOPPAN) has issued a strong warning against proposed regulatory changes by the Central Depository System and Clearing Ltd. (CDSC), which it claims could severely harm Nepal’s investment climate and jeopardize the country’s ambitious renewable energy goals.

In a press release today, SOPPAN expressed deep concerns over CDSC’s plan to introduce a separate International Securities Identification Number (ISIN) classification for promoter shares of companies entering the Initial Public Offering (IPO) process. The move, which would restrict the tradability of promoter shares in the secondary market, is seen as a major deterrent to both domestic and foreign investment in Nepal’s critical energy and infrastructure sectors.

Key Concerns Raised by SOPPAN

1. Threat to Renewable Energy Investments

Nepal has set an ambitious target of generating 28,500 MW of renewable energy by 2035, including large-scale solar and hydropower projects. SOPPAN argues that restricting liquidity for promoter shares will discourage long-term, high-risk investments needed for such capital-intensive projects.

“Renewable energy requires patient capital,” SOPPAN stated. “If promoters cannot exit or trade shares freely, investors will hesitate to commit funds, stalling Nepal’s clean energy transition.”

2. Foreign Direct Investment (FDI) at Risk

The proposed rules could also deter foreign investors by limiting their ability to repatriate dividends and trading gains. This contradicts the government’s push for FDI and could damage Nepal’s credibility as an emerging investment destination.

3. Policy Inconsistency Hurting Investor Confidence

SOPPAN highlighted a growing disconnect between Nepal’s pro-investment policies and restrictive financial regulations. “While the government promotes SDGs and economic growth, regulatory bodies like CDSC and SEBON are introducing counterproductive measures,” the association noted, warning that such inconsistency could lead to credit rating downgrades.

4. Broader Economic and Climate Consequences

The restrictions could slow infrastructure development, job creation, and Nepal’s progress toward climate resilience and Sustainable Development Goals (SDGs).

A Call for Urgent Reconsideration

SOPPAN has appealed to the Government of Nepal, Parliament, Ministry of Finance, Nepal Rastra Bank, SEBON, and CDSC to revisit the proposed regulations. The association emphasized the need for policy harmonization, regulatory stability, and investor-friendly reforms to sustain economic growth.