A group of 15 investors have launched a legal challenge to overturn Spain's decision to cut its feed-in tariff, reports Private Equity News. The group, who are thought to have invested more than €4 billion in the Spanish PV industry and includes private equity and infrastructure funds such as Impax Asset Management and Hudson Clean Energy Partners, are appealing the decision under the international Energy Charter Treaty.
“The changes that Spain has made to the sector will cause substantial harm to these investors. Spain’s actions appear clearly inconsistent with the investor protections afforded by the Energy Charter Treaty, which is why we and the investors believe there is very strong case for compensation,” said Stephen Jagusch, an international arbitration specialist at Allen & Overy, the law firm representing the investment group.
The appeal relates to a decision made by the Spanish government last August to introduce a 45% retrospective cut in tariffs for ground-based PV panels. Subsidies for large roof-based systems were also reduced by 25%, with smaller panels subject to a 5% reduction in a move aimed at saving €700 million.
Industry executives and investors say the subsidies should have been guaranteed for 25 years under a 2007 law. And the law suit follows the January 12 announcement by the Photovoltaic Business Association lobbying group that it would challenge the cuts in the Supreme Court.
A bill passed by the Spanish Senate in February called for the controversial tariff changes to be revoked; the Congress of Deputies is due to vote on the issue on Thursday.