IPAN Strongly Opposes Proposed IPO Directive, Chairman Dangi Demands Government Refund Rs 70 Billion and Revoke All Licenses

The Independent Power Producers' Association, Nepal (IPAN) has strongly objected to the draft of the Securities Board of Nepal's IPO Directive, 2083, which proposes that a company must have a net worth of Rs 100 to issue an IPO. IPAN has described the provision as adverse to the hydropower sector.

IPAN Chairman Mohan Kumar Dangi said the Securities Board's directive does not appear favorable to the private sector. "Looking at the draft directive, it does not seem flexible for the private sector. Therefore, we find ourselves fighting with the regulator rather than building projects," he said.

Dangi said the rule requiring a net worth of Rs 100 appears to have been introduced by someone who does not understand hydropower. "In hydropower, investment comes first," he said. "Income is generated only after the lights are on. Some expenses fall outside that Rs 100. Therefore, every project is in loss."

Dangi said the current directive is being introduced by people who do not understand the energy sector. "Some say that IPOs should be allowed only after a project is completed, but how can a project be completed without investment?" he said. "Such things pose a huge crisis for the energy sector. Instead, if someone has acted against the law, they should be punished. But the entire sector should not be put at risk."

Chairman Dangi said Rs 70 billion has been spent on projects of 17,000 megawatts. "Now, it would be better to do this: the government should revoke all licenses given to build projects," he said. "The government should refund our money."

Dangi said a discussion on the draft directive has been called for Sunday. "From that discussion, we will reach a conclusion on how to move forward," he said.