Japan issues missive to Andhra Pradesh over reworking of clean-energy PPAs: Report

Japan has cautioned the Andhra Pradesh state government against its decision to reduce tariffs on signed purchase power agreements (PPAs), as it will result in investors losing confidence, reported Economic Times.

Andhra Pradesh is one of the leaders in clean energy, which had seen renewable energy investors from France, South Africa and Europe.

Pointing out that this will not only harm the business environment of the state but also hinder its move to cleaner sources of energy, the Japanese Ambassador to India has requested the Chief Minister, Jaganmohan Reddy, to honour the contracts. Moreover, the report noted that developer companies are funded by overseas sovereign and pension funds which will be impacted by these reduced tariffs.

The report stated that Reddy had claimed that the renewable PPAs were improperly signed and sealed at higher tariffs by the previous government. Reddy has formed a committee to review these PPAs which has irked the project developers as per the report.