Investors harmed by Spain’s delays in renewable energy premiums have put forward a plan to the government aimed at resolving the awards that the state has not paid or has tried to invalidate. Backed by several international law firms representing roughly 80 percent of the affected companies, the proposal promises to drop the awards once the pending compensation is received and the funds are reinvested into Spain. The total compensation linked to all awards against Spain stands at 1.562 billion euros.
The announcement occurred in Madrid during the III International Conference on Renewable Energy, Investment and Legal Security. The group presenting the plan includes Nick Cherryman of Kobre & Kim LLP, Nikos Lavranos of NL Investment Consulting, and Lena Sanderb of Gibson, Dunn & Crutcher LLP. The state faces an estimated 198 million euros in late payment interest plus about 80 million in legal costs, bringing the grand total of due compensation to around 1.84 billion euros. Affected companies include global players such as RWE, Reenergy, Triodos, Nextera, Cubo, Soles Badajoz, and Eurus.
Companies argue that favorable rulings in other jurisdictions, including recent decisions from German and Swiss courts, reinforce their confidence to proceed with lawsuits and permit provisional embargoes on assets owned by the Spanish state. Arbitration has already led to sovereign asset freezes in the United Kingdom, targeting premises such as the Cervantes Institute in London, a UNED office, a Catalonia-related economic promotion site, and a bank account. There is also a partial seizure of the right to collect compensation for the Prestige oil spill, valued at more than 900 million euros.
Future embargos, including funds and law firms, indicate that assets have been located across eight jurisdictions where they could be seized quickly. They report assets exceeding 100 million euros. The organizers emphasize that their primary goal remains reaching an agreement with the government.
When asked whether the proposal originated from funds that bought stakes in the lawsuits or the affected companies, organizers replied that the source is not material. The commitment remains the same. They also noted that the plan would not target a specific energy type and acknowledged having met with government officials to seek solutions to end the dispute.
Some execution challenges
The publicly announced plan, believed to reflect the views of a majority of investors who have secured recognition of compensation through international arbitration, would be difficult to implement. The government would need to negotiate on a case-by-case basis, award by award, to determine whether companies agree to reinvest the recognized compensation in Spain. The administration, which has not yet paid any of the accumulated awards, would face a legal challenge justifying payments to some investors while withholding others based on how they intend to use the funds.
In many cases, energy firms that filed arbitration suits against Spain have ceded control of lawsuits and the rights to collect potential compensation to funds and specialized law firms. The compensation would accrue to these funds, not to the original energy companies. In this scenario, industry sources warn that the funds are unlikely to reinvest the awards in renewables in Spain after disentangling the companies from the cases.
The amount claimed against Spain reflects overdue awards triggered by the retroactive withdrawal of renewable energy premiums. The total debt approaches 1.9 billion euros. According to the portal Spanish Renewable Debt, overall debt stands at 1.87 billion euros, with 1.562 billion euros representing compensation for court rulings against Spain. An additional 309 million euros cover late interest and court costs, and 71 million cover fees for lawyers and consultants. The macroeconomic impact includes a negative effect on GDP estimated at 7.34 billion euros due to a technical default. These figures can change as new rulings and costs accrue.
Data from affected investors show that Spain’s debt tied solely to unfavorable rulings has doubled in under two years. In October 2022 the figure was about 700 million euros; by May 2024 it surpassed 1.5 billion and continues to rise as awards incur ongoing costs. The technical default declared in April 2023 by creditors when the Blasket Renewable Investments fund took control of four Spanish sovereign debt titles has pushed up interest payments by roughly 2.1 billion euros in treasury auctions, with the potential escalation to nearly 4.943 billion if the situation persists through 2024. The higher financing costs have increased pressure on the economy, reducing GDP projections by about 2.56 billion euros in 2023 and 4.78 billion euros in 2024, culminating in a macroeconomic impact near 7.34 billion euros.