KATHMANDU: Private energy entrepreneurs in Nepal have called for strong cooperation to help the government achieve its target of generating 28,500 megawatts of electricity in the next 10 years.
They believe that creating an environment for investing in hydropower projects through crowd financing is necessary to support the implementation of the ‘Energy Development Roadmap and Action Plan, 2025’ and to attract more investment.
The Independent Power Producers Association of Nepal (IPPAN) has urged the Public Accounts Committee of the Federal Parliament to address issues affecting the energy sector.
According to IPPAN, the Securities and Exchange Board of Nepal has stopped approving IPOs for 42 hydropower companies because of a rule requiring a ‘real net worth’ of over 90 to sell ordinary shares.
This directive was issued by the Accounts Committee in a meeting held on December 28, 2023.
IPPAN President Ganesh Karki said they have requested the Accounts Committee to assist private sector projects facing financial difficulties. He noted that locals are also questioning when they will receive shares.
To address these issues, IPPAN has urged the committee to allow the sale of ordinary shares under existing legal provisions.
IPPAN, which has 650 member companies, reported that out of the total 3,450 MW of electricity generated in Nepal, private companies contributed 2,740 MW through 190 projects.
In addition, 141 projects producing 4,063 MW are under construction, and another 141 projects generating 4,363 MW are awaiting financial management after signing Power Purchase Agreements with the Nepal Electricity Authority. More projects with a total capacity of over 8,000 MW have applied for agreements, and projects totaling 10,700 MW are waiting for construction licenses.
The private sector says it has already invested Rs. 1.5 trillion in these projects, but an additional Rs. 3 trillion is needed in the next 10 years to meet the energy goals.
IPPAN expressed concern over a rule that prevents basic shareholders in hydropower projects from selling one-third of their shares even after the lock-in period until the construction loan is fully repaid. They believe this rule could discourage equity investment in the hydropower sector.
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