An investment-treaty renewables claim.
- 01€890mDamages claimed
- 026Expert reports filed
- 0310 daysMerits hearing
- 04ICSIDArbitral institution
Our team was appointed by claimant’s counsel to assess losses caused by retroactive changes to a feed-in tariff regime for solar assets—a matter turning on legitimate expectations, regulatory return and the value of plants over their remaining life.
The question
The host state replaced guaranteed tariffs with a regime based on a reasonable return on an efficient standard plant. The tribunal needed to know what the investor’s portfolio would have earned under the original framework, and how much value the new regime had removed.
Our approach
We valued each of the portfolio’s plants on a discounted cash-flow basis under the actual and but-for regimes, using metered generation, contracted operating costs and market electricity forward curves. Regulatory return was modelled separately so the tribunal could test alternative views of a reasonable rate.
The evidence
The state’s experts argued that the reformed regime still delivered an adequate return. Our analysis showed that its benchmark plant bore little resemblance to the investor’s actual assets, and the tribunal adopted our plant-level approach when questioning both experts on the calculation of lost value.
The outcome
The tribunal found a breach of the fair and equitable treatment standard and assessed damages using the structure of our model. The confidential award cannot be disclosed; enforcement proceedings are now under way in several jurisdictions.
A regulatory benchmark is only useful if it resembles the assets actually in the ground.