Spain pays first arbitration award in long-running renewable subsidies dispute

MADRID, June 5 (Reuters) - The Spanish government has agreed to pay 32 million euros ($37 million) to a U.S. fund to end a legal dispute tied to renewable energy subsidies that were cut over a decade ago, an Energy Ministry spokesperson said on Thursday.

Foreign investors, mostly investment funds, took legal action against Spain after the previous conservative government cut renewables subsidies in 2013 to reduce a power tariff deficit built up through years of artificially low prices.

U.S. fund Blasket Renewable Investments had acquired the rights to the award from Japan's JGC Holdings Corporation, which won it under a 2021 ruling by the World Bank's International Centre for Settlement of Investment Disputes.

In 2024, the court shot down Spain's attempt to annul the decision.

Since the arbitration proceeding was from a non-EU investor, the payment doesn't clash with a March decision by the European Commission that told Spain not to pay up in a similar case as it would be a breach of EU state aid rules - which prevent governments from giving unfair advantages to one firm over competitors.

Cases from non-EU investors represent only 5% of the total, the spokesperson said, adding that Spain continued to pursue all legal avenues to defend its interests.

So far, Spain has been ordered to pay around 1.5 billion euros in various cases and the country has been able to reduce by 85% the amount demanded by investors, the spokesperson said.

($1 = 0.8754 euros)