Spanish Minister for Industry, Energy and Tourism José Manuel Soria has said the firms that are taking Spain to the International Centre for Settlement of Investment Disputes (ICSID) — the World Bank’s arbitration agency — were hoping for unreasonable returns of 20 percent on their investments in the country’s renewable energy sector.
“These companies made some investments considering there was going to be reasonable profitability of over 20 percent over their whole lifetime, and that does not happen in any country in the world because if it did, the result would be that the electricity system would simply go bankrupt,” the minister said.
State lawyers have supported the subsidy cuts to renewables included in the government’s new energy reform, he told a conference organized by the Chambers of Commerce.
In this way Soria responded to news published in EL PAÍS on Monday that the funds RREEF Infrastructure and Antin, linked to Deutsche Bank and BNP, respectively, have filed a complaint with the ICSID over the cuts, arguing that they will damage their renewable energy business and constitute a retroactive change to the rules of the game. “There is no regulation, rule or law in Spain that says the reasonable profitability of a regulated activity has to be 15, 20 or 25 percent,” Soria said before reminding his audience that the return on renewables has been fixed at 7.5 percent.