IPPAN Urges Hydropower Developers to Issue Local Shares at Face Value of Rs. 100

The Independent Power Producers' Association, Nepal (IPPAN) has urged all hydropower promoter companies to continue issuing shares to project-affected local communities at the face value of Rs. 100 per share, in line with existing legal provisions.

In a statement issued on Monday, IPPAN expressed serious concern over discussions by some hydropower developers about issuing local shares at a premium price due to delays in the initial public offering (IPO) approval process for certain hydropower projects.

According to IPPAN President Mohan Kumar Dangi, prolonged delays in the IPO issuance process have prompted some companies to consider alternative pricing for shares allocated to residents directly affected by hydropower projects. However, the association emphasized that such a move would contradict the spirit of the existing legal framework and could undermine the objectives of local share allocation.

Under the Securities Registration and Issue Regulations, 2073 (2017), hydropower companies are required to allocate 10 percent of their issued shares to project-affected local communities. IPPAN has called on all its member companies to ensure that these shares continue to be offered at their face value of Rs. 100 per share.

The association stressed that hydropower development is not merely an investment opportunity but also a long-term development partnership built on trust, cooperation, and shared ownership with local communities.

IPPAN noted that the provision for allocating shares to residents was introduced to recognize the contributions and sacrifices of communities that provide land for projects, bear environmental and social impacts, endure construction-related inconveniences, and support the successful implementation of hydropower projects.

The association warned that issuing local shares at a premium price would limit the participation of affected communities, weaken their sense of ownership, and potentially damage the trust that has been built over the years between project developers and residents.

According to IPPAN, providing shares at face value enables local communities to become genuine stakeholders in hydropower projects, strengthens their ownership, and helps minimize social disputes and project-related obstacles during construction and operation. The association believes this approach also fosters stronger local cooperation, facilitates timely project completion, and creates long-term economic benefits for residents through increased financial participation, local development, and social harmony.

IPPAN further urged the Government of Nepal, relevant regulatory authorities, and all hydropower developers to prioritize the interests of project-affected communities, ensure the long-term sustainability of hydropower projects, and preserve the healthy relationship between the private sector and local communities by maintaining the policy of issuing local shares at the face value of Rs. 100 per share.

The association also called on the government and regulatory agencies to simplify, improve transparency, and expedite the regulatory process related to IPO approvals. It stated that delays in the share issuance process have created significant challenges for hydropower projects and urged authorities to establish a more efficient and time-bound approval mechanism to ensure timely public offerings.