Tokyo’s envoy writes to CM Reddy, says move has unnerved foreign investors

Japan has cautioned the Andhra Pradesh chief minister that the state’s efforts to cut renewable energy tariffs by reviewing signed-and-sealed contracts has unnerved foreign investors and damaged the business environment.

India’s renewable energy sector has seen a flood of foreign investments with companies from France, South Africa and Europe participating in tenders. Industry executives said Andhra Pradesh’s actions could have severe implications because many renewable energy companies are funded by overseas sovereign and pension funds.

“Many foreign investors, including Japanese companies, are now watching closely the situation unfolding in your state regarding the renewable energy sector,” Japanese ambassador to India Kenji Hiramatsu told chief minister YS Jaganmohan Reddy in a letter. The missive has been seen.

Two of the biggest renewable energy developers in India have sizeable Japanese investments. While SB Energy is backed by Soft-Bank (along with Taiwan’s Foxconn and Bharti Airtel), one of the largest investors in ReNew Power is the Japanese energy company JERA. SB Energy is committed to commissioning 20 GW of projects in India.

The Japanese embassy confirmed the country’s concerns over the developments in Andhra Pradesh.