Lithuanian investor in renewable energy initiated international arbitration against Ukraine for €11.5 million

Modus Energy International, a member of the Lithuanian diversified company Modus Grupe, has initiated an arbitration against Ukraine for retrospective reduction of the FIT of approximately €11.5 million, according to a draft government order on the procurement of legal advisers to protect the interests of the state in arbitration, Interfax-Ukraine reports.

The draft, which provides for the granting of permission to the Ministry of Justice to apply a simplified negotiation procedure to such a procurement, was included in the agenda of the government meeting on Wednesday.

According to the explanatory note to the draft, the Ministry of Justice received a notice of arbitration against Ukraine on March 23 on behalf of the owner of Bolokhovskyi Solar Park 1 LLC, Bolokhovskyi Solar Park 2, as well as Solar Zalukava LLC – the Lithuanian company Modus Energy International.

The company, in particular, claims that Ukraine has violated the Energy Charter Treaty by cutting feed-in tariffs by 15% from August 1, 2020, the amount of which was guaranteed until the end of 2029, through the adoption of Law No.810-IX.

The note mentions that Modus Energy International did not agree to the terms of the June 2020 Memorandum of Understanding between the government and investors, which provides for a reduction in feed-in tariffs in exchange for repayment of debt to renewable energy producers.

The company asks the arbitration tribunal to recover from Ukraine, including the losses incurred, as well as interest on them and all costs of the arbitration proceedings.

As reported, in 2019 the National Energy and Utilities Regulatory Commission established the FIT of €15.03 per 1 kWh for solar power plants Bolokhovskyi Solar Park 1 and Bolokhovskyi Solar Park 2 by January 1, 2030. Investments in the project amounted to €30 million. Besides, Modus Grupe began the construction of two solar power plants with a total capacity of 46 MW in the first half of 2019 in Ukraine.

To recap, Shmyhal instructed the Ministry of Energy to find mechanisms for resolving the situation with renewable energy sources.

As reported, Zelenskyy signed a law on the restructuring of the FIT.

Tags: The Cabinet of Ministers, solar energy, court, legislation, electricity, NEURC, feed-in tariff, Зеленский, debt, renewables, investors, price

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