Governed by its constitution and derivative laws, a country
speaks through its policies. Sound economic and regulatory policy
creation coupled with effective implementation encourages investor
confidence and forms the fundamental basis of attracting large
volume and consistent investment. This is even more essential in
the power sector, which is characterized by capital intensive
requirements, the need for long-term cash flow and substantial
gestation periods.
Policy uncertainty has without a doubt adversely impacted the
country's stressed power capacity which was reported in 2018 as
being 40,130 MW, with 24,405 MW having been commissioned and 15,725
MW under construction. Of late, sanctity of contracts has emerged
as a significant contributor to the sectoral headwinds, as
witnessed most noticeably in the spate of unilateral tariff
reductions by the government of Andhra Pradesh (AP), which tried to
reduce the solar and wind tariffs of already executed and
