Political Risk

Should Andhra Pradesh - a state at the forefront of the renewables sector in the country - succeed in slashing tariffs, projects with a capacity of more than 2.5GW are at risk of defaulting.

The state of Andhra Pradesh is expected to fail in its attempt to renegotiate PPAs, but market sources fear a drawn-out court battle could still prove damaging.

The acquisition of a 95% stake in the renewables division of chemical manufacturer Swancor, includes a stake in the 376MW Formosa II project.

A lengthy approval process needs to be halved if the country is to meet its goal of installing 10GW of wind capacity by 2030, law firm White & Case says.

Investors fear a Labour government opposed to private infra ownership might be 'canary in the coalmine' for similar populist movements across Europe.

Resorting to a plebiscite to block the privatisation of airport operator ADP would not only be counterproductive, it would set a dangerous precedent whereby a minority in parliament could block legislation it didn’t like.

However, political risk, regulatory instability and lack of support for PPP projects are among the main concerns for those investing in region’s emerging markets.

Panellists debated whether foreign investment in infrastructure posed credible security risks or whether governments were exaggerating the threats.

Peter Costello said partnerships with local investors, but also greater transparency on the part of sovereign funds is the way forward.

After an unexpected feed-in-tariff cut, investors and developers ponder whether they have overlooked political risks in a seemingly promising market.