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Multi-cornered pressure on Jagan on PPAs

Multi-cornered pressure on Jagan on PPAs

YSR Congress party president and Andhra Pradesh chief minister Y S Jagan Mohan Reddy appears to be under pressure from all corners to revoke his decision to review power purchase agreements signed by the previous Telugu Desam Party government with solar and wind power producers at a high cost.

Jagan has been strongly defending his move, despite a series of letters from the Centre and also the power producers moving the high court.

At the diplomatic outreach programme held at Vijayawada last week, too, the chief minister gave a detailed explanation as to why he wanted to revisit the PPAs, as they caused a burden of Rs 20,000 crore on the state power distribution companies (Discoms).

Yet, the pressure is being mounted by the power companies through diplomatic sources as well.

According to a report published in Economic Times, even the Japanese consulate strongly opposed the review of the PPAs.

The Consulate General of Japan in Chennai apparently wrote letters to the State and the Central governments over the review of the PPAs.

In the letter, he said the move by the State government will have an impact on investments in India and also in Andhra Pradesh.

According to the report, two Japanese firms – SB Energy and Renew Energy – had invested heavily in renewable energy in Andhra.

Following a complaint by them over the proposed tariff revision by the Jagan government, they brought pressure on Japan ambassador, who in turn wrote the letter to the state and Centre.

Japan ambassador warned that the AP government action will have a negative impact on the massive foreign investments flowing into renewable energy sector in India now.

It remains to be seen how Jagan will counter this negative propaganda.

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Tags: Andhra Pradesh Jagan Japan PPAs TDP