Kathmandu. The Independent Power Producers’ Association of Nepal (IPPAN) has demanded the government to remove the requirement that there should be at least 20 percent documentation of financial progress for the construction of hydropower projects by issuing right shares.

The meeting led by senior vice-president Mohan Kumar Dangi led by Secretary at the Ministry of Energy, Water Resources and Irrigation Chiranjivi Chataut and Chairman of the Electricity Regulatory Commission Dr Yubaraj Khatiwada led the meeting. Submitting a memorandum to Dr Ram Prasad Dhital, the committee has demanded removal of the provision of 20 per cent financial progress for the construction of another project.

The IPPAN team has also demanded that the capital collected through right shares can be mobilized only for dedicated projects and only the share investors can participate in it.

Clause 5 of the Regulatory Commission’s Directive on the Prior Approval and Regulation of Public Issue of Electricity Shares, 2078 states that the financial progress of the proposed project should be at least 205 confirmatory documents in the Schedule 3 of the provision regarding the public issue of right shares for the construction of the project. According to this provision, the documents related to the loan agreement for the issuance of right shares to raise the self-capital of the proposed project are binding and it is impossible to achieve the financial progress of the proposed project until the self-capital is collected.

Stating that a huge amount of investment has already been made by the promoters for the project construction due to various studies, works to be carried out by obtaining license, detailed study, purchase of electricity and financial arrangements, IPPAN has urged the government to create a conducive environment to achieve the target of generating 28,500 MW by 2035.

Senior Vice-President Dangi urged the government to facilitate the issuance of right shares and pave the way for the construction of more projects. Stating that it was impossible to manage self-capital without issuing right shares and banks and financial institutions would not mobilize loan until self-capital is issued, he said that the construction of projects would be hampered.

Receiving the memorandum, Energy Secretary Chataut said that he would take initiative to resolve the problem seen in the issuance of right shares. Chairman of the Electricity Regulatory Commission, Dr. Dhital said that he would move ahead for a solution after holding detailed discussions on the difficulties that might arise due to the issue.