If all the renewable sector in Spain , along with the cogeneration industry, consumers, environmentalists and citizens were lodged against the electricity reform, now jumping on the bandwagon are the international investment funds, which have requested arbitration by the ICSID , the International Centre for Settlement of Investment Disputes.
There are four funds with interests in renewable energy in Spain who act as plaintiffs in the case. RREEF Infrastructure Limited and RREEF Pan-European Infrastructure Two Lux are funds investing in infrastructures that belong to Deutsche Bank, on the one hand, and Antin Infrastructure Services Luxembourg and Antin Energia Termosolar, French firms that invest in infrastructures where BNP is a partner and the main investor of the fund through which the company started its activity. They have all requested international arbitration before the ICSID (International Centre for Settlement of Investment Disputes ) for the impact that the Spanish Government’s electricity reform has caused to the return on their investments.
Requests for Arbitration
On 22 November, the four funds filed arbitration claims against Spain, while, for their part, companies like Acciona or Abengoa have also taken legal action against different parts of the reform undertaken by the Spanish Ministry of Industry.
Not to mention, the other demands added, as that presented in 2011 by PV investors that invoked the so-called Energy Charter, which aims to protect investments in other countries.
The legal advisor of the arbitrations before ICSID and the Energy Charter is Allen & Overy, a London based specialized law firm whose services have been hired by funds and international investors with interests worth more than 13,000 million euro in renewable energy in Spain.
What is ICSID
The International Centre for Settlement of Investment Disputes, dependent of the World Bank, is an autonomous intergovernmental organization with a its own governing body, an Administrative Council and a Secretariat. At present, ICSID has 142 member countries.
However, as stated in the Convention, ratification by the States of the Convention of Washington that created was the ICSID does not entail any obligation for the contracting states to be subjected to ICSID’s arbitration or conciliation mechanisms.
Legal status of renewable
According to APPA, investments in Spanish renewable energy have been experiencing cuts in recent years and have now been further impacted with the steps taken by the present government with electricity reform.
Currently, the renewable sector is pending on the report under preparation by two independent consulting firms, Boston Consulting and Roland Berger, and that will stipulate the vague concept of the reasonable return by setting incomes to be perceived by green investments. According to industry sources, once the details of the report are known, litigation against the Government could intensify.