Attempts by state power distribution companies (discoms) to renegotiate power purchase agreements (PPAs) will bode poorly for investors in the sector, a report by credit ratings agency ICRA has said. The report was in context of the Andhra Pradesh state government constituting a high-level committee to review, negotiate and bring down the cost of wind and solar PPAs tied-up by the discoms.
The state government has attributed the high-cost wind and solar power PPAs to the large power purchase dues from the discoms to the power generators, and thus has recommended reviewing the high cost wind and solar agreements and to negotiate and bring down the prices of wind and solar power PPAs.
