Spanish government tells World Bank it will not pay €2-billion ICSID awards for renewable energy debts

Spanish renewablesRenewable projects

The World Bank has sent a devastating letter to the Spanish government to demand payment of the awards that condemn our country to compensate the companies and investors affected by the retroactive withdrawal of the premiums granted to renewable energies. The ICSID, the World Bank’s international arbitration tribunal, reminded the PSOE and Podemos government that it cannot neglect its obligations and that it must compensate the companies that have suffered this situation of legal uncertainty over the past decade, for a total value estimated at around €2 billion.

The digital newspaper Libre Mercado has also been able to access the response sent by the State Attorney’s Office to the ICSID and, according to the documentation presented, the Spanish government continues not to recognise its obligations and reaffirms its position of non-payment, but at the same time admits that Spain’s image is being damaged by the consequences of these non-compliances.

In the letter, dated 31 March, the State Attorney’s Office points out that the World Bank does not have the capacity to oblige Spain to comply with these obligations. This approach is an affront to the system of international arbitration under which commercial disputes of this nature are resolved. After all, if all countries were to default, the whole arrangement would collapse. Therefore, it is worth remembering that Spain is the country with the second highest number of unpaid international awards, behind Venezuela and ahead of Russia.

It seems that Sánchez insists on non-payment and is skirting his obligations, but on the other hand he is concerned about the consequences of this decision to leave without compensation those whose rights have been recognised in the proceedings before the World Bank (proceedings which, moreover, Spain recognised at all times, attending to present its defence and thus validating the legitimacy of a court which now, after learning of its decision, he does not respect).

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.