Kathmandu. It has been suggested to allow hydropower companies to issue IPOs only after power generation.
The high-level economic reform suggestion commission formed by the government has made this recommendation in its final report. The commission has already submitted its final report to Deputy Prime Minister and Finance Minister Bishnu Poudel.
A high-level commission headed by former finance secretary Rameshwor Prasad Khanal has suggested that hydropower companies should be allowed to issue IPOs only after they start generating electricity. The commission has suggested that the IPO of hydropower companies should be tightened.
In December last year, the Public Accounts Committee (PAC) had directed the securities board to have a real net worth of more than 90 to issue an IPO. At present, the high-level commission’s suggestion seems to be difficult for the hydropower company to bring an IPO.
Following the directives of the Public Accounts Committee, the IPO permission of more than three and a half dozen hydropower companies has been stopped in the Securities Board. The high-level commission’s suggestion not to allow ipOs without generating electricity now could create more complications for hydropower companies to raise capital through IPOs.
According to IPPAN, out of the total 3,450 MW of electricity produced in the country, 190 projects worth 2,740 MW have been completed by the private sector alone. Similarly, 141 projects of 4,063 MW are under construction and 141 projects of 4,363 MW are awaiting financial management by signing power purchase agreement (PPA) with Nepal Electricity Authority( NEA).
