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The Independent Power Producers’ Association, Nepal (IPPAN) has congratulated the newly appointed Chairperson of the Securities Board of Nepal (SEBON), Dr. Gopal Prasad Bhatta, while urging the regulator to immediately remove obstacles delaying share issuance by hydropower companies. IPPAN stated that prolonged delays in approving initial public offerings (IPOs) and rights shares have seriously affected under-construction hydropower projects and the country’s capital market.

An IPPAN delegation led by President Mohan Kumar Dangi, along with Senior Vice President Uttam Bhulon Lama, Vice President and Coordinator of the Securities–NEPSE Coordination Committee Him Prasad Pathak, Vice Presidents Bikram Bista and Susan Karmacharya, General Secretary TN Acharya, Deputy General Secretary Kabita Pokharel, and other officials, submitted a memorandum to Chairperson Bhatta.

According to IPPAN, except for a handful of companies, most hydropower firms have not received approval to issue IPOs since mid-May 2023. At present, around three dozen companies are awaiting IPO approval, while about a dozen others are waiting for approval to issue rights shares.

The association said the delays have directly impacted hydropower projects with a combined capacity of around 4,000 MW that are currently under construction. Since project developers rely on capital raised through IPOs to secure bank financing, delays in approvals have created serious difficulties in loan management. IPPAN added that directives from Nepal Rastra Bank regarding loan repayments, along with increasing pressure from commercial banks, have further strained these projects.

IPPAN noted that the private sector has already developed around 3,500 MW of electricity generation capacity, has 5,800 MW under construction, and more than 20,000 MW in various stages of development. It expressed confidence that the private sector can help achieve the government’s target of generating 30,000 MW of electricity, provided that capital market processes become faster, simpler, and more predictable.

Through its memorandum, IPPAN proposed three immediate measures and eight long-term policy reforms. The association called for the implementation of the 2023 memorandum of understanding between SEBON and IPPAN, the prompt approval of all pending IPOs and rights share applications, and the immediate advancement of the dematerialization process for promoter shares.

IPPAN also proposed introducing a mandatory one-month approval timeline for IPO applications once all required documents have been submitted, establishing a one-door system among SEBON, the Electricity Regulatory Commission, rating agencies, and underwriters, eliminating overlapping legal procedures, reducing IPO-related fees, limiting the lock-in period to a maximum of 18 months, introducing a 10-year Hydro Capital Market Policy, implementing a tier-based system according to project capacity, and counting shares allocated to local communities as part of the public shareholding quota.

The association emphasized that SEBON should introduce prompt policy and implementation-level reforms to safeguard long-term investment in Nepal’s energy sector and maintain the momentum of hydropower development.

Urjasanchar