Bloomberg | 4 June 2025

Spain makes first payment in lengthy renewable energy fight

By Irene Garcia Perez

The Spanish government made its first payment as a result of an arbitration decision in 2021 around the country’s move to change investor incentives tied to renewable energy projects, following a number of lengthy legal battles between Spain and various creditors.

An entity called Blasket Renewable Investments, which petitioned a claim against the country in the US, notified a US federal court on Wednesday that Spain had “fully satisfied” a final judgment ordering the payment, court documents show, without specifying how much was paid.

The original World Bank award in May 2021 totaled €23.5 million ($26.8 million), separate court documents show, but has been bearing interest since then.

It’s the first time investors have received funds awarded under the World Bank arbitration award relating to environmental investments in Spain, Matthew D. McGill, lead counsel for Blasket, said in a statement.

“We welcome the Government of Spain’s decision to pay this award,” McGill said. “The Spanish Government must now recognize that the many other awards entered against it will be enforced by courts around the world and that those awards, too, must be paid.”

By continuing “to defy its international obligations, the Spanish government only further burdens the Spanish taxpayer and discourages international inward investment at a time when it is vital to encourage investment in energy and infrastructure projects,” he added.

“This doesn’t mark a change from Spain’s traditional position” on the issue, a government spokesperson said in a response to an inquiry from Bloomberg News. European Union “doctrine establishes that paying the ruling is considered state aid, but in this case we are talking about a case outside” the EU, the spokesperson said.

“This situation is completely exceptional. Spain maintains its position of defending national interests. It continues and will continue to litigate,” the government said in an additional statement. “This stance has led to winning nine arbitration proceedings, to obtain three annulments, one resignation and three dismissals, and reduce the amounts claimed by 85%.”

Spain pledged certain incentives in 2007 to draw investment in renewable energy projects. However, the country’s government withdrew the attractive terms to rein in its fiscal deficit in 2011. Since then, Spain has found itself in court over the incentive pullbacks.

Since 2023, the country has been receiving default notices
and court orders backing the seizure or freezing of some of its overseas commercial assets as part of different creditor efforts to get paid under the World Bank award. Spain had been refusing to pay up until now, arguing that any payouts could be against European Union law and be considered illegal state aid.