Investors in Nepal’s Energy Sector Lose Over NPR 108 Billion Due to SEBON Delays

The Independent Power Producers’ Association of Nepal (IPPAN) has claimed that investors in Nepal’s energy sector have lost nearly NPR 108.5 billion because the Securities Board of Nepal (SEBON) delayed the approval process for issuing shares.

According to a letter sent by IPPAN to SEBON, after May 2023 (2080 Jestha), delays in approving IPOs and rights share issuances affected 50 companies — 43 preparing IPOs and 7 preparing rights offerings, representing projects with a combined capacity of 975 MW. Because of these delays, IPOs worth NPR 23.27 billion could not be issued, NPR 12.40 billion in additional interest costs were incurred, NPR 24.30 billion in project costs escalated, and NPR 71.78 billion in potential government revenue was lost.

IPPAN stated that the delays were caused by the absence of a SEBON chairman and new requirements, such as demanding over 90% net worth for share issuance — a condition not mandated by law. During this period, SEBON approved IPOs for only 10 companies and rights issues for 11 companies.

IPPAN President Ganesh Karki urged SEBON to immediately allow IPOs for companies that have already applied and to permit share issuance during the construction phase, not only after project completion. He emphasized that IPO proceeds are critical for reducing bank loan dependency and keeping project costs under control.

IPPAN also reminded SEBON that both institutions had signed a 12-point agreement in September 2023 (2080 Bhadra 24) to strengthen governance, make the energy sector more organized and accountable, and address public concerns. However, IPPAN expressed dissatisfaction that this commitment has not been implemented effectively.