PHOTON ENERGY INVESTMENTS N.V.: Czech parliament votes to extend solar levy

Photon Energy Investments

[ Fotos ]

Amsterdam (pta016/20.08.2013/10:15 UTC+2) On 16 August 2013 the Parliament of the Czech Republic passed a Bill limiting the support for Renewable Energy starting 1 January 2014 and simultaneously - in yet another retroactive measure - extending the Solar Levy for the remainder of the applicable Feed-in-Tariff period for PV plants connected in 2010 (about 1,400 MWp affected) at the level of 10% of revenues. The Czech Republic had retroactively introduced the Solar Levy at the level of 26% of revenues for PV plants connected in 2009 and 2010 (about 1,800 MWp affected) for the years 2011-13 in late 2010. Before becoming Law this Bill will need to be approved by the Senate and signed by the Czech president.

Based on the current Bill Photon Energy Investments would have to write down the value of 14.2 MWp of PV plants in the Czech Republic by approximately EUR 5.25 million. Based on energy production performance in 2011 and 2012, the lower Solar Levy would lead to an additional pre-tax cash flow of approximately EUR 1.25 million annually.

"Not adjusting returns, but raping investors and trying to get away with it has again been the driver behind this decision. After stealing some EUR 650 million from investors over the past three years, for additional revenues of some EUR 70 million annually the Czech Republic has again chosen to remain among the world's Banana Republics, as equally confirmed by numerous international transparency and corruption rankings. The most tragic part of this whole saga is that the European Commission is looking the other way while bona fide investors in renewable energy assets are getting robbed in broad daylight", concluded Georg Hotar, CEO of Photon Energy Investments NV.

The management board of Photon Energy Investments is working with industry representatives to convince members of the senate to strike the Bill down. In case of its adoption the management board of the Company is intent on protecting its rights and the value of its investment via international arbitration in cooperation with numerous other international investors.

In response to the 26% Solar Levy introduced in 2010, two groups of international investors have initiated international arbitration against the Czech Republic based on the Energy Charter Treaty and Bilateral Investment Treaties between their home countries and the Czech Republic. In a comic twist of fate, the special advisor for international arbitrations to the Czech Ministry of Finance , Mr. Radek Snábl, has been dismissed together with his team of three specialist lawyers on the same day said Bill passed parliament. Judging by comments made by Snábl after his dismissal, the level of the Solar Levy going forward had been closely coordinated with the Prime Minister and calibrated so as to be supposedly defendable in international arbitration proceedings.

Given the volume of Renewable Energy sources which have been connected in the Czech Republic since 2006, the motives for limiting the support of new capacities are understandable. What is entirely unacceptable is that after the unprecedented retroactive introduction of the 26% Solar Levy in 2010, which had a devastating effect on project returns and capital structures, the Czech Republic did it again despite assurances that the original 3-year levy had been "sufficient to bring ex-post project returns in line with the Law's original intention". This Bill comes after a dirty 3-year campaign by the highest representatives of the state against domestic and international investors in PV plants, who had invested around EUR 6 billion into some 2,000 MWp of installed PV capacity in good faith and with legitimate expectations based on a valid law.

(end)

Emitter:	PHOTON ENERGY INVESTMENTS N.V. Barbara Strozzilaan 201 1083HN Amsterdam Netherlands
Contact Person:	Jan Krcmar
Phone:	+420 277 002 910
E-Mail:	jan.krcmar@photonenergy.com
Website:	www.photonenergyinvestments.com
ISIN(s):	DE000A1HELE2 (Bond)
Stock Exchange(s):	Free Market in Berlin, Frankfurt, Hamburg, Hannover