Market Research Telecast | 6 August 2021
The Irish Spanish Solar sues Spain in the ICSID for the cut in premiums to renewables
The fight of international investors against Spain for the cut in premiums for renewables at 7% decreed by the former president Mariano Rajoy in 2013 -in full economic crisis and to reverse the payment of 25% interest to the ‘green’ facilities approved by the socialist Jose Luis Rodriguez Zapatero to encourage its use- threatens to eternalize. With active complaints still worth about 5,000 million euros, now the Irish Spanish Solar joins the long list of complainants and has submitted a new arbitration demand to Spain before the Ciadi, the body internationally responsible for these disputes depending on the world Bank.
Registered on August 3, Spanish Solar’s claim joins that of almost a hundred other international investors who have turned to ICSID over the last nine years. According to a report from the Independent Authority for Fiscal Responsibility (AIReF) in May, the total amount of claims reaches 10,000 million euros.
Investors, such as Spanish Solar, demand compensation from the Spanish Government for having cut the premiums for the use of these energies once the investments have been made, which is known as ‘changing the rules of the game in the middle of the game’. Zapatero imposed a 25% premium to promote its use and Rajoy, in the midst of the economic crisis, reduced it to 7% with the approval of Brussels.
The ICSID rulings have partially proved the plaintiffs right, albeit reducing the initial claims by significant amounts. This is the case of the German RWE, which requested 420 million euros and the ICSID determined that Spain only had to pay 7%, 28 million.
Two arms of the Government
In addition, the Government has two weapons in its favor. In the first place, he uses all his appeals before the ICSID and usually asks for the annulment of the files before this organism due to incompatibility of the appointed judges, a strategy that has given him good results on occasions. He also just did it in the case of the Bay Wa claim.
Secondly, several resolutions of European Union organizations are in favor of Spain, considering that the payment of these compensations would suppose State aid and would therefore go against European law. This is the argument that has served so that Brussels has questioned a few days ago the award that obliges Spain to pay 101 million to the Luxembourgian Antin.
Antin sued Spain on November 22, 2013 and in 2018 the ICSID determined that the energy company had the right to collect 101 million euros of the 218 it claimed. Spain requested the annulment of the process and, now, Brussels aligns itself with Spain and has initiated an investigation of this file that could end with the request by the Commission for the annulment of the award. «The Commission will investigate whether the additional support granted by the arbitration award is necessary for the development of an economic activity, has an incentive effect and is proportionate. Likewise, it will investigate whether granting this support only to Antin may unduly distort competition, “he assures.
Despite all these antecedents, Spanish Solar hopes to be able to twist the arm of Spain and Europe and has proposed a new arbitration against the State.