Derisking political risk
The first thing what the incumbent Chief Minister of Andhra Pradesh did after assuming charge of office was to order cancellation of many projects awarded by the preceding government ( see here ). The Andhra Pradesh Government also decided to reopen power purchase agreements (PPAs) inked under the previous TDP government, that could potentially bring 5.2GW solar and wind energy projects with an estimated debt exposure of over INR21,000cr under stress ( see here ). The state moved ahead with this proposal despite strong request from central government ( see here ) and order of the High Court ( see here ). Subsequently, the World Bank decided to "drop" funding of “Amaravati Sustainable Infrastructure and Institutional Development Project”, seriously affecting the future of the project which has already swallowed Rs 45,000 crore worth of public money with less than twenty per cent of the work completed. ( See here ) Following the World Bank, the Asian Infrastructure I...