Kathmandu. Finance Minister Rameshwor Prasad Khanal has said that it would be appropriate to grant IPO permission to hydropower companies only after the lights are lit.

During a meeting with a delegation of the Independent Power Producers’ Association of Nepal (IPPAN) on Monday, Minister Khanal said that the IPO of hydropower companies that have already applied for the IPO will not be appropriate until further laws are formulated.

Speaking at the meeting, IPPAN Chairman Ganesh Karki said that the Securities Board of Nepal (SEBON) has stopped the IPO of hydropower companies for the past 28 months, causing a total financial loss of more than Rs 100 billion to the promoters and the state.

Chairman Karki said that the public issue of more than Rs 23 billion of 4 dozen companies in the pipeline should be done as soon as possible, the hydropower companies should not have a net worth to get permission for IPO. He demanded that the rule of granting permission for IPO after completion of 65 percent of the construction should be implemented and the CDSC has not listed the shares of hydropower companies that have already issued public IGN number to the general public and promoters.

Chairman Karki also urged Khanal to be serious about resolving the problem as the bank has started pressuring the companies that have taken loans against the IPO to repay the loan and the way to get money from the IPO is uncertain.

The then Prime Minister KP Sharma Oli had addressed the House of Representatives (HoR) saying that the ‘take and pay’ provision was included in the Power Purchase Agreement (PPA) of river flow based projects in the budget for the current fiscal year. IPPAN has also urged Finance Minister Khanal to remove the provision of Tech and Pay PPA from the budget and facilitate the opening of PPA.

Likewise, the government has been allowing the import of spare parts from hydropower projects by imposing 28 percent customs duty for the last two years as per the provisions of the Electricity Act. ।

After listening to the IPPAN delegation, Finance Minister Khanal said that although he had suggested that it would be appropriate to give IPO permission to hydropower companies only after the lights are on, necessary laws have not been formulated for the implementation of the suggestion.

Responding to a query from the Securities Board of Nepal (SEBON) of the projects that have not been completed, Finance Minister Khanal said, “There is no law to implement the suggestion of IPO after the lights are on.

Finance Minister Khanal said that the House of Representatives is needed to make new laws or amend the laws, but now that the House of Representatives has been dissolved, hydropower companies should get permission for IPO as per the existing law.

He also pledged to work to boost the morale of the energy producers as per the mandate of the government by relying on the existing laws.