Kathmandu: The Independent Power Producers’ Association, Nepal (IPPAN) has stated that shares allocated to local residents directly affected by hydropower projects should be issued at face value (par value) of NPR 100 per share.
In a statement issued on Sunday, IPPAN expressed serious concern over discussions by some hydropower developers about issuing shares to project-affected local residents at a premium price after the initial public offering (IPO) process of several hydropower projects was delayed for a long time due to regulatory reasons.
Referring to Rule 9, Sub-rule (4) of the Securities Registration and Issue Regulations, 2017, which requires that 10 percent of shares be allocated to benefit local residents, IPPAN urged all its member companies to issue those shares to local communities at face value, in accordance with the existing legal provision.
According to IPPAN, hydropower projects are not merely investment opportunities but development initiatives built on trust, cooperation, and partnership with local communities. The association said that shares are allocated to locals to ensure they become project owners in recognition of their contribution by providing land, bearing environmental and social impacts, and supporting successful project implementation.
IPPAN warned that issuing shares allocated for local communities at a premium price would limit their access, weaken their sense of ownership, and negatively affect trust between projects and local communities.
The association believes that issuing shares at face value will make local residents genuine partners in hydropower projects, strengthen their sense of ownership, reduce social disputes and project-related obstructions, and enhance local support during project construction and operation. It added that this would help create a favorable environment for completing hydropower projects on time while ensuring long-term economic benefits for local communities.
IPPAN urged the Government of Nepal, regulatory authorities, and project developers to continue the policy of issuing shares allocated to project-affected local residents at face value, prioritizing the interests of local communities, the long-term sustainability of projects, and harmonious relations between the private sector and local people.
The association also called on the concerned authorities to simplify, make transparent, and expedite the regulatory process related to IPO issuance and to address the problems hydropower projects have been facing due to prolonged delays in the share issuance process.
Jalasarokar
