Foreign Investors Sue Spain Over Retroactive Subsidy Cuts

摘要

International investors are taking the Spanish state to arbitration over what they deem illegal retroactive cuts to feed-in tariff contracts designed to spur renewable energy. After a series of moves starting in 2010 — attacks on revenue, caps on operating hours, feed-in tariff reductions and a moratorium on new project incentives — the cash-strapped Spanish government took the radical step last year of removing guaranteed feed-in tariffs completely and replacing them with an approximate 7.5% rate of return on investment, based on 10-year Treasury Bonds plus 300 basis points. The decision, made as part of reforms under a new Energy Sector Act, applied to projects already in operation. That proved the final straw for foreign investors, which have since filed eight arbitration cases against Madrid in international courts — and lawyers say more may follow.