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Solar investors react to Government estimates of potential arbitration liability; again invite the Government to talk

Prague June 13, 2011 – It was recently reported that the Czech Ministry of Finance is seeking authority to appoint legal counsel to represent it in connection with claims notified by investors in the photovoltaic industry.  In the report, reference is made to quite significant sums, up to CZK 250 billion, as estimates of overall potential liability for the “solar arbitrations.”

“I do not recognize those figures. They did not come from us,” said Frank Schulte, General Secretary of IPVIC and CEO of Voltaic Network GmbH, one of the companies that have already sent a trigger letter to the Czech government. He noted that even by government estimates the total solar levy to be charged annually by the government is about CZK 4.2 billion under last year’s law, saying “The potential claims by international investors will be claims for amounts commensurate with the damage incurred, no more. The IPVIC members who have notified the Government of a potential claim are currently observing the periods provided for in the relevant treaties for efforts to negotiate a settlement, so they have not yet quantified any claim for damages.”

With respect to those efforts at negotiation, Schulte said that IPVIC members have not yet heard anything from the Government about how the Government plans to rectify the situation and restore the trust in the stability and predictability of the Czech economic environment and the Czech solar sector in particular. “That is unfortunate,” he added, noting that “As we told the Government when giving notice of claims, IPVIC members stand ready to engage in constructive discussions if the Government is willing to initiate them.”

International PhotoVoltaic Investors Club (IPVIC) is an association of international and domestic investors in photovoltaic energy. IPVIC members include a number of individual entrepreneurs and small and medium sized enterprises. Among the member companies are the German firm Voltaic Network GmbH, the German private investor Milos Schubert, the Luxembourg-based company Radiance Energy Holding, the Swiss firm Antaris Solar and the Czech company Ren Power. In May 2011, the number of IPVIC members reached 20 companies. Their solar projects have the installed capacity of 140 MWp.

IPVIC has appointed the law firms Freshfields Bruckhaus Deringer LLP and Glatzova & Co. to represent them in the legal aspects of their discussions with the Czech state regarding the recent dramatic retroactive changes to the legal and regulatory framework for the solar sector. Donath Business & Media (DBM) is the association’s media representative.


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