The Hydro Heist: How Nepal’s Hydropower IPOs Are Turning into Legal Loot

TL;DR: Hydropower IPOs are being sold as patriotic investments to Nepalis; at home and abroad. But dig deeper, and they start to look more like a get-rich-quick scheme for a few insiders. From inflated construction costs to IPO exits, promoters have turned our rivers into cash machines, often without building anything meaningful. And the worst part? It’s public money (including yours and mine) that’s funding this.

If you’ve been in any Nepali Viber/WhatsApp group recently, chances are someone forwarded you a link for a hydropower IPO.

“Apply garna na birsinu hola!”
“Desh banaune share ho ni!”
“1 kitta Rs. 100 ma aaucha, 300/400 samma jaancha!”

It feels like a national movement. Nepalis in Sydney, Tokyo, and New York are lining up online to apply. Parents in Nepal proudly show off their DEMAT statements. Even the neighbourhood Kirana pasal dai is giving tips.

Hydropower IPOs feel like patriotism with a side of profit. But what if this “clean energy dream” is being quietly turned into a money-minting scam, by the very people who claim to build the country?

Let’s break it down.

The Promise: Cheap Shares, Big Dreams

Nepal has the potential to generate over 83,000 megawatts of hydroelectricity; clean, green power from our own rivers. About 40,000 MW is financially feasible. We currently generate less than 3,000 MW.

So, building hydropower should be a no-brainer, right?

And what better way than inviting the public to own a piece of it? IPOs (Initial Public Offerings) allow people like us to buy shares in these projects at just Rs. 100 per kitta. After listing on NEPSE, many of these shares jump in value; Rs. 300, Rs. 400, sometimes more.

Sounds like a win-win.

But there’s a twist. By the time we apply, most of the real money has already been made, and taken.

Where the Heist Begins: Paperwork, Not Power

In Nepal, the hydropower game starts not with building a dam, but with collecting papers. A “survey license” gives you exclusive rights to study a stretch of river. Many never plan to build anything. They just flip this paper to someone else for a huge profit.

Next comes the “generation license.” Again, this can be sold. Then comes the golden ticket: the Power Purchase Agreement (PPA) with NEA, Nepal’s electricity authority. Under the “take or pay” model, NEA must buy all electricity you generate, whether they need it or not.

These three documents; survey, generation, PPA, are worth crores on paper, even if no construction has started. They help promoters secure big bank loans.

The Big Play: Inflate, Borrow, Extract

Once funding is secured, construction starts. Or at least, it seems to.

But here’s what really happens:

• Construction costs are inflated; reported at Rs. 20 crore per MW, when the real cost might be Rs. 10 crore.

• Contracts are awarded to shell companies linked to the promoters.

• Loan money meant for construction gets rerouted (legally, of course) into the promoters’ own pockets.

They’ve already made their money. And the project isn’t even finished.

The IPO Exit: Rs. 100 ko Love Letter

Now comes the IPO, the part we see.

The company, already padded with inflated costs and loans, sells shares to the public. The IPO is framed as a chance for the public to “own hydropower” and “build the nation.”

But what we’re really doing is bailing out the promoters.

And while their shares are under a three-year lock-in, they wait patiently. Once the lock-in ends, the rules allow them to quietly convert their promoter shares into public shares, and sell without raising alarms.

Take Himalayan Hydropower, for example. Their three-year lock-in ended July 11. On July 13, its highest-ever trading volume was recorded.

Coincidence?

The Real Coup: Right Shares and the Rinse-Repeat Cycle

Before promoters leave the board, they issue right shares, asking existing shareholders to contribute more money. But not to improve the current project.

Instead, the company invests in a new hydropower venture, started by the same promoters. That investment helps the new company secure more bank loans.

Same cycle. Different name.

It’s like those pyramid schemes where money from one batch of investors funds the next batch, and the promoters keep rising to the top.

And the public? We’re left holding the bag.

Sound Familiar? Remember Cooperatives?

In the 2000s, cooperatives were the darling of Nepali finance. High returns, safe investments, until they weren’t. When the crisis hit, thousands of people lost their life savings.

Hydropower IPOs are starting to look dangerously similar:

• Public money

• Insider control

• Weak regulation

If a few of these hydro companies collapse, it could shake our entire financial system. Mutual funds, insurance companies, pension funds, they all hold hydro stocks.

Even if you’ve never applied for an IPO, your money is in the game.

Who’s Watching the Gate? SEBON’s Missing Role

The Securities Board of Nepal (SEBON) is supposed to vet these companies. But recent allegations suggest some IPO approvals may be linked to backdoor payments.

If our financial referee is also compromised, then who’s protecting the public?

The system has no brakes.

Why Should the Diaspora Care?

You’re abroad. You work hard. You send money home. You invest in land, savings, IPOs. You want to contribute to Nepal’s growth.

That’s why this should concern you even more.

Your remittance might be fueling the same system that’s quietly taking public money and turning it into private profit. And if it crashes, your family’s savings, maybe even your retirement plans, could vanish with it.

The dream of “building Nepal” can’t become another story of betrayal.

What Can Be Done?

This isn’t doom and gloom. There are real solutions. But they need political will and public pressure.

1. Regulate hydropower like banks.

2. Independent cost audits to stop inflated contracts.

3. Lock promoters into long-term accountability, no more 3-year escape hatches.

4. Stop the “right share to new project” trick unless it passes independent review.

5. Make SEBON truly independent, and accountable.

The Rivers Are Real. The Scam Doesn’t Have to Be.

Nepal’s hydropower potential is not a myth. We can light up our villages, export clean energy, and create jobs. But only if we fix the system.

Otherwise, the same rivers we hope will power our future will continue to power a silent, legal heist.

Let’s not wait for another cooperative-style collapse. Let’s act before our rivers turn into rivers of regret.

If this resonated with you, share it. Talk about it. Question the next IPO pitch you hear. The diaspora has power. Economic, political, emotional power. Let’s use it to demand better.

And if you want to dig deeper and know it all, read this deep dive from Khatapana Team: https://khatapana.com/blogs/519/hydro-ipos-are-turning-into-legalized-loot-next-coops