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Why Hydropower Stocks on NEPSE Could Be Poised for a Historic Rally August 31, 2020 (2077-5-15 BS) Are you eyeing hydropower shares on the Nepal Stock Exchange (NEPSE)? Do you sense a “Hydro Bull” market brewing in the coming days? Many investors believe hydropower stocks—currently trading at what seems like their lowest ebb—could soon surge to all-time highs. Here’s an insightful breakdown of why hydropower might be the next big opportunity on NEPSE, backed by economic, policy, and market dynamics as of mid-2020. 1. Single-Digit Interest Rates Boost Profitability Banks and financial institutions are offering loans to hydropower projects at single-digit interest rates—a sharp decline from previous years. For instance, rates that once hovered above 12% have dipped below 10%, driven by excess liquidity in the banking system. Lower borrowing costs directly enhance project profitability, making hydropower companies more attractive on NEPSE. With reduced interest expenses, cash flows improv...

Nepal is often hailed as a hydropower goldmine, with studies estimating a technically and financially viable capacity of over 42,000 MW. This potential could transform the nation into a regional energy hub, exporting electricity to neighboring countries like India, where demand is high, and generating trillions of Nepalese rupees in foreign currency. Hydropower could be a cornerstone of economic development, prosperity, and energy security for Nepal. The government has prioritized this sector, introducing reforms to encourage growth, but progress remains frustratingly slow—akin to a “tortoise walking.” Despite the immense potential, Nepal currently utilizes less than 3% of its capacity, importing over 400 MW from India while many regions still lack electrification. Per capita electricity consumption remains among the lowest globally. As a professional banker with eight years of experience in hydroelectric financing, I’ve witnessed firsthand the opportunities and challenges in this se...