Kathmandu: Solar Power Producers’ Association, Nepal (SOPPAN) has expressed serious concern regarding the recent proposal by the Central Depository System and Clearing Ltd. (CDSC) to introduce a new class of ISIN for promoter shares of companies entering the Initial Public Offering (IPO) process.
The move, which seeks to dematerialize promoter shares as a separate class of shares and impose restrictions on their secondary market tradability, risks destabilizing Nepal’s burgeoning energy and infrastructure sectors and undermines national economic ambitions, SOPPAN claims.
SOPPAN has spelled out its principal concerns regarding the current proposal from CDSC as follows:
Threat to investment in renewable energy
This regulation comes at a time when Nepal is aggressively pursuing a 28,500 MW renewable energy development target by 2035, including expansive solar PV and hydropower projects. Restricting share liquidity, particularly for promoters, deters the very patient and visionary capital needed for high-risk, capital-intensive renewable energy investments.
Discouragement of Foreign Direct Investment (FDI)
By curbing the freedom of foreign investors to repatriate dividends and trading gains, the policy jeopardizes one of Nepal’s critical financing sources. Such restrictions contradict the Government of Nepal’s commitment to attracting foreign capital and dilutes confidence in Nepal as a viable investment destination.
Policy Inconsistency and Risk to Investment Grade Ratings
SOPPAN notes with regret the severe policy incoherence reflected in this move. While the government champions investment drives and sustainable development goals (SDGs), regulatory bodies such as CDSC and SEBON are introducing counterproductive provisions. Nepal’s investment grade, already fragile, could be further downgraded—jeopardizing future capital inflows and economic progress.
A Call for Coordinated Governance
The prevailing “left hand does not know what the right hand is doing” syndrome in policymaking is dismantling the capital markets and discouraging both domestic and international stakeholders. SOPPAN has urged that policy harmonization across institutions be treated as a national priority.
Protecting the Golden Goose
Infrastructure and energy projects demand long-term, patient capital, with returns commensurate to risk. These restrictive measures could extinguish investor optimism just as the sector begins to thrive. The metaphor is clear: don’t kill the golden goose that lays the golden eggs.
Impact on National Growth, Employment, and Climate Goals
The implications extend beyond economics. Nepal’s pursuit of climate resilience, carbon reduction, and SDG alignment depends on robust and inclusive investment frameworks. Jeopardizing investor
confidence is tantamount to stalling national progress.
SOPPAN’s Appeal
SOPPAN has respectfully called on the Government of Nepal, the Parliament, Ministry of Finance, Nepal Rastra Bank, SEBON, and CDSC to urgently reconsider these regressive provisions. Regulatory stability, transparency, and investor-friendly policies are essential to ensuring that Nepal remains on course to achieve its development, sustainability, and prosperity goals.
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