Economy
IPO Approval Delays Stall Hydropower Projects and Disrupt Capital Mobilisation in Nepal
By Ranjeet Yadav • 5/7/2026, 12:36:30 PM
Reading time: 3 min
7 May Kathmandu Long delays in the approval of Initial Public Offerings (IPOs) are badly affecting the hydropower sector of Nepal, disrupting financing plans, delaying construction and raising overall project costs, Nepal’s hydropower developers said.
Industry representatives say dozens of hydropower companies are waiting for months and even years for approval from the Securities Board of Nepal (SEBON), creating a major bottleneck in capital mobilisation.
⚡ Challenges for Hydropower Projects
Funding for hydropower projects in Nepal usually comes from a mix of:
- Bank borrowings
- Promoter investment
- IPOs (Initial Public Offerings)
The normal financing arrangement is heavily reliant on public investment through IPOs, developers say. Companies find it hard to maintain the debt-equity ratio required by banks when approvals get held up.
Resulting in:
- Loan growth is slowing down
- Construction schedules are being impacted
- Project costs are increasing due to delays and new agreements
Energy projects are financially at risk from prolonged uncertainty, warn industry leaders.
📊 SEBON Massive Backlog
Reports indicate that more than 98 companies are waiting for IPO approvals and are looking to raise over Rs 66 billion from the capital market.
Among them:
- Rs 15 billion for 32 hydropower companies demanded
- Several manufacturing, tourism and investment companies also in pipeline
Stakeholders said the backlog grew due to:
- Leadership instability in SEBON
- Offices »
- Protests and regulatory clashes in the institution
🏦 Banks Getting More Cautious
Banks are becoming increasingly reluctant to release further finance as projects have failed to meet equity mobilisation targets, developers say.
Some hydropower companies are said to have borrowed money in anticipation of IPO approvals in a short time frame, but continual delays have disturbed the financial cycle.
“Experts warn that if capital mobilisation continues to stall:
- Nepal's energy targets could be undermined
- Confidence of investors might worsen
- Private sector involvement can bring down
⚠️ IPO Rules Debate
The issue has also stirred debate on SEBON’s approval criteria.
Some developers say recent rules, such as higher “real net worth” requirements and restrictions on IPO issuance until after projects are completed, are making it more difficult to raise money.
SEBON officials, however, said approvals only come after companies fulfil all regulatory requirements including:
- Fiscal compliance
- Ratings
- Technical and legal requirements
The regulator says recent introduction of new frameworks are to improve transparency and speed up the approval process.
🌍 Why is Nepal so Hydropower-Centric
Nepal’s abundant water resources and energy potential make hydropower one of the country’s most prominent economic sectors. Hydropower has been promoted as a driver of a number of national policies:
- Economic development
- export earnings
-Industrial development
Experts warned that meeting those goals will require a stable financing environment and efficient regulatory systems.
📌 Abstract
The IPO approval process is being delayed continuously, exposing the deeper problems of Nepal’s financial and regulatory system.
Regulators tout compliance and transparency, but developers say extended delays are exacting a heavy price on one of Nepal’s most strategic sectors.
With pressure mounting from investors, banks and project developers, the government and SEBON are likely to feel more pressure to speed up approvals and rebuild confidence in Nepal’s capital market.
Tags: Nepal Hydropower, IPO Delay Nepal, SEBON Nepal, Nepal Energy Sector
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