The European Commission has opened an in-depth investigation into a €61m compensation measure awarded to ACF Renewable Energy over changes to Bulgaria’s renewable energy support scheme.
The probe will examine whether the compensation – which has not yet been paid to the Malta-based developer – constitutes state aid and is therefore incompatible with EU law, according to the commission.
The Malta-based developer invested in Bulgaria’s renewables sector in 2012 through the acquisition of a solar PV plant benefitting from a renewable energy support scheme that Bulgaria implemented in 2011.
Following changes to the support mechanism in 2013 and 2014, ACF continued to receive support but initiated arbitration proceedings and claimed compensation for the payments it would have received under the original scheme, according to the commission.
An arbitral award of 5 January 2024 ordered Bulgaria to compensate ACF for losses allegedly suffered due to the modifications of the support scheme. The compensation amounts to €61.04 million, plus interest, the Commission said, adding that Bulgaria notified it of the award as required under state aid rules.
In a statement the Commission said that its “preliminary view” is that the arbitration award would constitute state aid, which is prohibited unless it is approved by the Commission. “The Commission will investigate further the measure and its compatibility with the internal market, and in particular a possible breach of the EU Treaties by the aid measure,” the Commission said.
It added that it will also investigate whether the award and its implementation breaches regulations designed to ensure uniform application of EU laws across Member States.
“The opening of an in-depth investigation gives Bulgaria and interested third parties the opportunity to submit comments,” the Commission said. “It does not prejudice in any way the outcome of the investigation.”