india

Updated: Sep 09, 2019 19:19 IST

Union minister for power and renewable energy R K Singh on Monday said the decision taken by the Y S Jagan Mohan Reddy government in Andhra Pradesh to review power purchase agreements with solar and wind power producers had a negative impact on global investments in the energy sector.

Speaking to reporters in Hyderabad to explain the achievements of Narendra Modi government in the first 100 days, Singh found fault with the Jagan government to go ahead with the review of the PPAs ignoring the Centre’s objections.

“The decision has started impacting the global investments in India’s energy sector,” he said, refusing to elaborate on the quantum of investments affected. “What has transpired is what exactly I feared. People come and invest in this country with a faith that any contract they sign will be honoured. If you start abrogating contracts, then people will stop coming and invest,” he said.

Singh said Indian renewable energy sector was largely driven by foreign investments as the world considered India as an outstanding market based on the rapidly growing capacity additions and the legal contracts signed. “The Andhra government’s decision to review PPAs has now hit the legal block. All the investors who were called for renegotiations had moved the high court or the electricity tribunal,” he pointed out.

Describing Jagan’s decision as “unfortunate,” the Union minister said his efforts to convince the state against such review through letters and personal talk proved unsuccessful. “The state government is free to act on any irregularities but it cannot take blanket action against all the PPAs without substantial material evidence,” he said.

In June, both Singh and also Union energy secretary Anand Kumar wrote to the Andhra Pradesh chief minister and also to chief secretary L V Subrahmanyam, expressing their fears that the move to renegotiate PPAs would have an adverse effect on the foreign investments. They informed the state government that various countries’ provident funds was invested in the sector in India.

The Jagan government, which suspects massive corruption in the power deals, is confident that the power tariffs could be brought down if the energy companies were convinced for renegotiations.