Friday, July 30

Spain condemns for the cuts of Rajoy to renewables is sold: reason, a Luxembourg fund

The Luxembourg fund Cube, one of the foreign investors that has obtained a conviction against Spain in recent years for the cuts to the remuneration of renewable energies by the Government of Mariano Rajoy, wants to sell the favorable award it obtained in 2019 from the arbitration court of the World Bank (ICSID).

Cube “is working on the sale of the Spanish arbitration award”, it indicates in the accounts for the year 2019 that it has recently deposited in the Luxembourg Commercial Registry.

This fund manages, through its Spanish subsidiary, RPI, which also has for sale, more than a dozen hydroelectric facilities in Spain with a capacity of 54.6 MW.

Among them is the Requejada waterfall (Palencia), acquired by RPI in 1991, which has 5 MW of power and built in 1950 the extinct Unión Española de Explosivos. This plant is on the list of facilities whose concession will expire soon, according to the Ministry for Ecological Transition. Specifically, it does so in 2028.

The RPI group, which has declined to attend, also manages, according to its latest accounts presented (2019), two hydroelectric jumps in the province of Toledo (Higares and Lavaderos, in the Tagus, with 3.2 MW of power) whose concession has expired since 2019, the year in which the award that he now wants to sell was issued.

With the price of electricity soaring, the debate on the creation of a public energy company that assumes these concessions, which Podemos demands, has returned to the scene. The Minister for the Ecological Transition, Teresa Ribera, rejects it, although she recently admitted that there are “interesting” experiences.

“We have a good number of hydroelectric concessions that have expired or are about to expire. And that allows us to think about how, in your case, when we want, let’s think, in what way these same jumps can be used, either for storage, or for electricity generation, or for proximity management, or for a new tender, “said Ribera. in his last appearance in Congress.

“We must update what we are talking about, what the benefits are, the public interest behind it and how the greatest possible benefit can be promoted.”

In February 2019, Cube succeeded in having the ICSID convict Spain and recognized a compensation of 33.7 million euros, plus interest and costs, to compensate him together with his partner, the French fund Demeter, for the cuts suffered by the hydroelectric and photovoltaic plants acquired between 2008 and 2012.

Both sued the Spanish State in June 2015. Cube demanded compensation of more than 60 million: 11.14 million for three photovoltaic plants and close to 50 million (Demeter requested another 13.11 million) for the lower profitability of the hydroelectric assets of its Spanish subsidiary RPI.

This compensation has not been paid. In November 2019, Spain asked ICSID to annul the ruling, which contained a dissenting vote by one of the three arbitrators. This procedure is pending resolution. The plaintiffs have tried to force his execution in the United States and on May 31, the Court of the District of Columbia (United States) denied Spain’s request to dismiss the execution procedure.

Cube began investing in photovoltaics in Spain in July 2008, in a joint venture with the French EDF, which it became a 100% owner in 2017, until it sold those assets in November 2019. In June 2011 they bet on hydroelectric, with the acquisition of RPI.

The Abengoa case

The sale of awards to investment funds is common in disputes with high-risk countries. In the case of arbitrations for renewables, an example in Spain is that of Abengoa. The Sevillian group, which has requested 249 million from the State rescue fund after filing bankruptcy and appears on the last list of defaulters of the Treasury, sold in 2019 for 75 million to “a group of funds of recognized prestige” part of the arbitration rights that he presented to the Stockholm Chamber of Commerce for the cut to the solar thermal power plant. The company claims compensation of about 1,200 million from the State through a subsidiary in Luxembourg.

On June 29, Teresa Ribera pointed out in Congress that the Government will “continue to sue for the interest of Spain” to stop the arbitrations that led to the Rajoy reform, which turned the country into “international pariahs” in the eyes of foreign investors, with about fifty lawsuits demanding compensation amounting to about 10,000 million.

Ribera explained that Spain has so far won arbitrations amounting to more than 1,240 million and carries about 1,000 million in convictions “that we are still appealing.” “So far we have saved 4,582 million to the public coffers, still having another 4,200 million pending in arbitrations.” One of the arguments that Spain is using for not paying is an EU Court ruling known as Achmea, which denies the validity of an investment arbitration when the two litigants are European, as in the case of Cube.

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