Abu Dhabi investment company, Masdar, has sued the Spanish government. The company helped build three solar power plants in Spain taking advantage of the existing subsidies. But Spain has now cut incentives for renewable energy.
The cut in incentives will give Spain nearly $2.5 billion.
Masdar, who has invested more than $1 billion in three solar power plants in Spain, became the fourth major investment fund to sue Spain for slashing solar thermal energy subsidies. In November, RREEF Infrastructure, Deutsche Bank's asset management division, and Antin Infrastructure, a French infrastructure investment fund, sued Spain over the subsidy cuts. In December, Eiser Infrastructure Partners became the third investment fund to sue Spain.
A spokesman for a Dutch subsidiary of Masdar, Solar & Wind Cooperatief UA told Reuters:
"As a result of the Spanish government's unwillingness to overturn the regulatory changes, we are pursuing legal action to protect our investments."
The lawsuits, which were filed with the International Center for the Settlement of Investment Disputes, claimed that Spain's decision to reduce premiums paid for electricity produced by solar projects amounts to an act of expropriation - or, wrongful government appropriation.
In January, Spain's Supreme Court said that the subsidy cuts did not infringe the economic rights of 14 solar power project developers. It added that the cuts were necessary to reduce the tariff deficit, which refers to the difference between what utilities claim it costs to produce electricity and what they actually charge customers.