VIJAYAWADA: Even as the YS Jagan Mohan Reddy government is firm on renegotiating and reviewing renewable Power Purchase Agreements (PPA) and has initiated steps in this direction, the Centre has once again warned the State that such a move would not only be detrimental to investors’ interests but is against law.
Union Minister of State for Power and New and Renewable Energy RK Singh shot off a letter to the AP chief minister on July 9 in this regard. Despite the caution, the government has summoned wind power developers for a meeting with the high-level negotiation committee (HLNC) on Monday to ‘hold negotiations on high-priced tariffs’.
The Union Minister observed that the growth of the renewable energy sector, in which all major pension funds of the world were invested, would come to a halt if contracts were not honoured. “Power Purchase Agreements (PPAs) are contracts binding on all signatories. If the contracts are not honoured, the investments will stop coming in.
For the above reasons, it will be wrong and against the law to cancel all PPAs,” he said, suggesting that an appropriate course would be to reopen or cancel a contract where a prima facie case of corruption is presently based on ‘objective evidence’. Earlier on June 6, Secretary of MNRE Anand Kumar had written a similar letter to the chief secretary that reviewing PPAs would shake investors’ confidence.