International PV Investors Demand Compensation or Repeal for Retroactive Spanish PV Tariff Changes Under International Investment Treaty

London, Madrid (ots) - International investors have served demands
on the Spanish government seeking reparation under an international
investment treaty for Spain's retroactive changes to the solar
photovoltaic (PV) tariff regimes. This is only the second time that
the Energy Charter Treaty has been used against an EU15 country. The
investors, represented by the international law firm Allen & Overy,
have invested in over EUR4 billion of Spanish PV projects. The
investors include strategic investors and energy, infrastructure and
cleantech funds. These investors manage over $30 billion on behalf of
more than 70 workers' pension plans and other institutional and
individual investors, who collectively manage over $3 trillion in
capital for global investment.

The demands come as the Spanish Congress of Deputies prepares to
vote on Thursday 10 March on a bill passed by the Spanish Senate on
23 February calling for the repeal of Spain's retroactive changes to
the PV sector. The demands also follow official criticism of Spain's
actions from the European Commission. On 22 February 2011, European
Commissioners Gunther Oettinger and Connie Hedegaard sent a letter to
the Spanish government condemning Spain's retroactive actions.

The investor demands are under the Energy Charter Treaty, a
multi-lateral investment treaty designed to protect cross-border
energy investments such as solar PV. Of the over 25 claims brought
under the ECT since it came into force, only one has been brought
against an EU15 country. The other claims have been predominantly
brought against Eastern European or former Soviet Union countries.

Fifty-one countries, including all members of the EU and the
European Community itself, are signatories to the Treaty. The Treaty
was designed to protect foreign investors who have made investments
in the energy sector of the signatory countries. The demands are the
first step in a process that will allow investors to seek reparation
from Spain before international arbitration tribunals if Spain does
not repeal the offending provisions or provide compensation.

Stephen Jagusch, specialist international arbitration partner at
Allen & Overy, said "the Energy Charter Treaty was created to foster
long-term cross border energy investments and to protect foreign
investors from improper government interference. The ECT gives
investors legal rights above and apart from local law. The changes
that Spain has made to the PV sector will cause substantial harm to
these investors. Spain's actions appear clearly inconsistent with the
investor protections afforded by the Energy Charter Treaty, which is
why we and the investors believe there is very strong case for
compensation."

Allen & Overy was chosen by the investor group following a
rigorous selection process. Allen & Overy has one of the leading
Energy Charter Treaty arbitration practices and, lead by Stephen
Jagusch, brought the first case ever under the Treaty.

This is an important case for Spain and for investors in the
energy sector in Europe more widely. Spain needs to maintain the
confidence of foreign investors in all sectors, which it has
jeopardized by its unlawful changes affecting existing investments.
Further, renewable and low carbon energy is at the very heart of EU
energy policy, and is also critical in the global battle against
climate change. Approximately EUR1 trillion of investment is required
in the EU alone over the next 10 to 20 years to achieve its low
carbon targets. For that investment to happen, investors need clear
and stable regulation.

Spain's actions have undermined investor confidence in Spain, and
threaten to do so across Europe. Today's actions by investors are an
important first step in enforcing their Treaty rights. It is also a
clear warning to governments inside and outside the EU to provide a
stable regulatory framework for investments and that they must comply
with their obligations under the Energy Charter Treaty.

The International Investors participating in this action include:
AES Solar, Ampere Equity Fund, Element Power, Eoxis Energy,European
Energy, Foresight Group, GreenPower Partners, GWM-Lux Energia Solar,
HgCapital, Hudson Clean Energy, Impax Asset Management, KGAL GmbH &
Co. KG, NIBC Infrastructure Partners, Scan Energy, White Owl Capital
and several others. These investors manage over $30 billion on behalf
of more than 70 workers pension funds and other institutional and
individual investors who collectively manage over $3 trillion in
capital for global investment.

About the Energy Charter Treaty

The Energy Charter Treaty provides a multilateral framework for
energy cooperation and investment unique under international law. The
Treaty is designed to promote energy security and to protect foreign
investments in the energy sector against key non-commercial risks,
including discriminatory treatment, expropriation and unfair and
inequitable regulatory change. The Energy Charter Treaty was signed
in December 1994 and entered into legal force in April 1998. To date,
the fifty-one countries, the European Community and Euratom have
become bound by the Treaty.

The Treaty provides a comprehensive system for settling disputes
on matters covered by the Treaty. In particular, it allows foreign
investors to take host governments directly to international
arbitration for violations of the Treaty. It creates separate
supra-national legal rights. The fact that changes to investments may
be legal under local law is not a defense under the Treaty. The
supra-national legal rights coupled with the right to international
arbitration is important in encouraging signatory countries to
observe their Treaty obligations and in promoting a stable
environment for investment in line with the aims of the Treaty.

About Retroactive Spanish PV changes

The investors are seeking reparation for retroactive changes
introduced in recent months by the Spanish Government that materially
affect the value of existing investments. Under the original law, PV
projects were entitled to sell their entire output for the life of
the installations - generally considered 40 years at the full tariff
(including a certain tariff for the first 25 years and a lower tariff
from year 26 onwards). In November and December 2010 the Spanish
Government (i) capped the hours of production eligible for the
tariffs at 20-30% below existing production for 2011-2013, (ii)
imposed lifetime caps on production that affect a large number of
projects and (iii) limited the tariff initially to 25 years (though
with February amendments it was extended to 30 years). These
changes, particularly the drastic cuts over the next three years,
threaten the viability of many installations, including those of
international investors and the over 200,000 Spanish citizens that
have also invested in PV installations.

The Spanish government claims that it introduced these retroactive
measures to generate cost savings in the energy sector and avoid
increasing end-consumer power prices. The Government also made
changes to the conventional power, wind power and solar thermal power
sectors. However, the changes to those sectors were not retroactive,
leaving the solar PV sector bearing a disproportionate burden.
Mainly owned by foreign funds and over 200,000 small Spanish savers
and international investors, the photovoltaic sector does not carry
the political clout of the conventional power, wind power and solar
thermal sectors which are dominated by domestic utilities and
construction companies.

Contact:
The investors request that any questions be directed to their legal
counsel, Allen & Overy.

Primary Contact:

Stephen Jagusch
Allen & Overy LLP (London)
+44 (0) 203 088 3882
stephen.jagusch@allenovery.com

Secondary Contact:

Antonio Vazquez-Guillen
Allen & Overy LLP (Madrid)
+34 91 782 9800
antonio.vazquez-guillen@allenovery.com