The European Commission has opened an in-depth investigation into a 61 million euro ($66 million) compensation award granted to ACF Renewable Energy over changes to Bulgaria’s renewable energy support scheme, saying it will assess whether the measure amounts to unlawful state aid under EU rules.
The compensation, which has not yet been paid, follows an arbitration ruling ordering Bulgaria to compensate the Malta-based developer for losses linked to revisions of the country’s renewables support framework. The Commission said Bulgaria notified it of the award in line with EU state aid requirements.
ACF invested in Bulgaria’s renewable energy sector in 2012 through the acquisition of a solar photovoltaic plant that benefited from a support scheme introduced in 2011. Subsequent changes to that mechanism in 2013 and 2014 altered the level of support, prompting ACF to initiate arbitration proceedings while continuing to receive revised payments, according to the Commission.
An arbitral award dated Jan. 5, 2024 ordered Bulgaria to pay ACF 61.04 million euros, plus interest, for losses the company said it incurred as a result of the changes.
In a statement, the Commission said its “preliminary view” was that the compensation would constitute state aid, which is prohibited unless approved by Brussels. “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,” it said.
The Commission added that it would also examine whether the arbitration award and its implementation could breach EU regulations aimed at ensuring the uniform application of EU law across member states.
“The opening of an in-depth investigation gives Bulgaria and interested third parties the opportunity to submit comments,” the Commission said, adding that the move “does not prejudice in any way the outcome of the investigation.”
