Lithuanian investor SES Modus Grupe seeks EUR 11.5 mln damages in intl arbitration against Ukraine
Modus Energy International, a member of the Lithuanian diversified company Modus Grupe, has initiated an arbitration against Ukraine over the retrospective reduction of feed-in tariffs in seeking to compensate damages of EUR 11.5 million, according to a draft government resolution on the procurement of legal advisors services to defend the interests of the state in arbitration.
The draft resolution, authorizing the Ministry of Justice to apply the simplified negotiating procedure, was included in the agenda of the government meeting on Wednesday.
According to an explanatory note to the draft resolution, the Ministry of Justice received a notice of arbitration against Ukraine on March 23 from the owner of Bolokhivsky Solar Park 1 LLC, Bolokhivsky Solar Park 2, as well as Solar Zalukva LLC – the Lithuanian company Modus Energy International. The company, in particular, claimed that Ukraine violated the Energy Charter Treaty by lowering feed-in tariffs from August 1, 2020 by 15%., the amount of which was guaranteed until the end of 2029, through the adoption of Law No. 810-IX.
According to preliminary estimates, the damages claimed are EUR 11.5 million.
According to the note, Modus Energy International did not agree to the terms of the Memorandum of Understanding between the government and investors signed in June 2020, which provides for a reduction in feed-in tariffs in exchange for repayment of debts to electricity producers from renewable energy sources.
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.
For its part, the Ministry of Justice points out in a note that a meeting of the Interdepartmental Working Group was held on April 2, at which it was deemed expedient to involve a legal advisor to properly protect the interests of the state in arbitration in the course of applying the negotiation procedure for the purchase of its services.As reported, the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) in 2019 approved a feed-in tariff of 15.03 euro cents per 1 kWh for solar power plants Bolokhivsky Solar Park 1 and Bolokhivsky Solar Park 2 until January 1, 2030. Investments in the project amounted to EUR 30 million. In addition, in the first half of 2019, Modus Grupe began construction of two solar power plants in Ukraine with a total capacity of 46 MW.