led central government
is exploring a law to protect investments affected by state governments’ decisions to scrap contracts. This is to reassure foreign investors who are riled up by YS jagan
Mohan Reddy Government's plan to annul some clean energy agreements. It is known to our readers that the jagan government
decided to reopen renewable energy contracts inked under the previous state government
led by his rival Chandrababu Naidu.
The move drew criticism from the Union government
, as well as governments of france
, and Japan. The Center feels that is has sent a very bad signal to international
investors. The Act being explored is that in the event
of investments reaching a certain stage, a state government
can’t arbitrarily cancel the contracts. In the event
of any such step taken by a state government
, it will attract penalties and will make it difficult for them to do so
Despite several warnings, the jagan government is still adamant about canceling the renewable energy pacts. Andhra Pradesh’s decision could put at risk 5.2 gigawatts (GW) of solar and wind energy projects, with an estimated debt exposure of more than ₹21,000 crores.