Blogs and advice from Industry leading Specialists
Valuable Opinions, Comments & Gossip
Financial related News & Articles relating to Spain
Latest News, Stories
& Hot Topics
Various Tools & Widgets to help with your financial needs
Tools & Widgets to
help with finances
Polls, Surveys and Opinions featured throughout Tumbit
Featured Polls, Surveys & Stats
Discussions, Advice & Topical Chat
Discussions, Advice & Topical Chat

Spain loses arbitration claim over renewable energy subsidy cuts

Source: El Pais - Sat 6th May 2017
Spain loses arbitration claim over renewable energy subsidy cuts

Spain has lost the first of the international arbitration processes underway over its cuts to renewable energy subsidies. The International Centre for the Settlement of Investment Disputes (ICSID) has rendered an award in favor of the British-based Eiser Infrastructure Limited and its affiliate Energia Solar Luxembourg, stating that the Spanish government violated Article 10 of the Energy Charter Treaty, thus depriving the company – a fund with ties to ABN Amro – of fair and equitable treatment.

The three arbitrators appointed to the case, which was registered in 2013, condemned the Kingdom of Spain to pay €128 million in compensation plus interest. The figure falls short of the more than €300 million requested by the claimants.

The decision is a major setback for Spain, which is facing dozens of similar cases filed by other companies that invested in solar energy at a time when Madrid was offering premiums that attracted many foreign investors, including a sovereign fund from Abu Dhabi, German municipalities and a Canadian civil service pension fund – all of which subsequently filed compensation claims.

If Spain loses further claims, the cost to Spanish taxpayers could run into the hundreds of millions of euros.

The Spanish Energy Ministry said it is thinking about appealing the decision, and that “the result of this award cannot be extrapolated or set a binding precedent.”

In two previous arbitration cases, the decisions favored Spain. In January 2016, the Stockholm Arbitration Tribunal ruled in Spain’s favor in a claim filed by Charanne B.V. and Construction Investments over cuts to photovoltaic subsidies. A further claim has since been dropped.

Eiser had partnered with Elecnor in Spain, and with the engineering firm Aries. An investment of €935 million was made in 2007 on three thermosolar plants in Ciudad Real and Badajoz. That was the year that Spain passed a decree that triggered a surge in renewable energy investment, as investors sought a piece of the premium pie.

But Spain slid into an economic crisis soon thereafter, and the sector underwent cuts. The first one was in late 2010, under a Socialist administration, and the last one took effect in 2013, under Mariano Rajoy of the Popular Party (PP). In 2014 alone, Spanish consumers were still paying €6.5 billion in renewable premiums.

Recommended Reading :

* Spain's use of renewable energy sources stagnates

* Brussels chides Spain over subsidies for harmful fossil fuels

Comment on this Story

Be the first to comment on this Story !!

Related Partners

Recommended Items

Related Articles

Related Blogs