The lawyer who will represent a Lithuanian solar developer which has brought a international claim against the government of Ukraine for retroactively reducing solar feed-in tariff (FIT) payments, has commented on reports of successful legal claims brought by Ukrainian peers.
Ukrainian financial news service Finbalance on Monday reported local developers had already won significant payments from the state-owned entity set up as guaranteed purchaser of clean electricity.
London-based lawyer Tomas Vail – of Vail Dispute Resolution, which will represent Lithuanian company Modus Energy International BV in its claim against Kiev – has told pv magazine: “Many other renewable energy producers are also engaged in local court litigation with the state-owned guaranteed buyer in respect of outstanding debts, and reports indicate they have so far been able to recover debts in the amount of UAH700 million [€20.8 million].”
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Vail said the Modus claim differs from the others because it is the first that has been lodged in the context of an alleged breach of the Energy Charter Treaty international agreement, to which Ukraine and Lithuania are both signatories. With the case due to be heard by the Stockholm Chamber of Commerce, the lawyer added: “Whereas … domestic claims may be constrained by the budget of the guaranteed buyer, investment treaty claims are levied against Ukraine and its state organs, agencies and instrumentalities, in respect of Ukraine’s obligations under international law, such as those reflected in the Energy Charter Treaty.”
The Finbalance report referred to by Vail – which pv magazine has read using an online translation service – claimed the UAH700 million settlements previously settled with clean power developers have now been supplemented by successful actions, at the Economic Court of Kiev, by ‘Ajax Dnepr’, which the website reported successfully claimed UAH26.1 million (€776,000); ‘New Ukrainian Energy Solutions’ (UAH22.9 million); ‘Solar Energy Plus’ (UAH16.1 million); ‘Tavan Solar’ (UAH13.4 million); ‘Euroimex’ (UAH9.7 million); ‘Goodwelly Ukraine’ (UAH6.9 million); ‘Ekoprod CJSC’ (UAH5.5 million); and ‘Ukrainian Solar Group-Vinogradovo’ (UAH4.9 million), for a total bill of UAH806 million for the energy offtaker.
Referring to the Finbalance story, Vail added: “[Electricity transmission system operator] Ukrenergo reported debts of UAH22.4 billion [€669 million] at the end of 2020 and debts of UAH15.8 billion in mid-May 2021, in respect of 2020, with new debts in respect of the first half of 2021 – in an, as yet uncertain amount – also accruing.”
The government of Ukraine retroactively reduced FIT payments for clean power generators in August, to ease the financial burden on the public purse, with the holders of signed contracts suffering reductions of 2.5-15%.
A note issued by London based legal and tax consultancy CMS Cameron McKenna Nabarro Olswang LLP last month, which referred to the minutes of a Ukrainian government cabinet meeting, stated Modus was set to suffer a FIT reduction of 15% on payments it had agreed to 2029. The note said the payments related to three solar farms owned by Modus in Ukraine which have a combined generation capacity of around 47 MW.
Russian news agency Interfax has reported Modus is claiming €11.5 million and said the company, part of the Lithuanian Modus Group, was not among the clean power developers who signed up to Kiev’s proposal to reduce FIT payments.
Originally published on pv-magazine.com