The International Center for Settlement of Investment Disputes (ICSID) has agreed with Enagás in its litigation against Peru and has ordered the South American country to pay 194 million dollars (about 186 million euros) – principal plus interest – to the Spanish company for the process opened by the Gasoducto Sur Peruano (GSP) project.
As reported by Enagás to the National Securities Market Commission (CNMV), the body dependent on the World Bank condemns the South American country for violation of the Agreement for the Promotion and Reciprocal Protection of Investments signed between the Republic of Peru and the Kingdom of Spain (APPRI Peru-Spain).
The Court also considers that the inclusion of Enagás Internacional in category 2 of Law 30737, which prevents the company from repatriating dividends of its subsidiary Transportadora de Gas del Perú (TGP), constitutes a violation of the BIT Spain-Peru.
Specifically, the sentence involves the payment of an amount of 176 million dollars, plus annual interest of 1.44% calculated in a simple way from January 24, 2018 to today’s date and capitalized semiannually from this date until the payment of the compensation, which represents that total 194 million dollars as of today, as well as 75% of the procedural costs.
The group led by Arturo Gonzalo pointed out that This award would imply an accounting loss in the income statement for the difference between the amount recognized in the award -194 million dollars- and the account receivable -505 million dollars (about 484 million euros) related to the investment in GSP recorded in the balance sheet. Enagás added that the impact will be included in the 2024 annual accounts once a detailed analysis of the award has been carried out.
Likewise, he stressed that his legal advisors are analyzing the award in detail and in this regard he reserves the right to request a rectification or clarification of the quantification of the recognized amount.
Furthermore, Enagás has already expressed to the Peruvian authorities its willingness to reach an amicable agreement that allows the execution of this award in a manner that suits the interests of both parties.
On the other hand, the company reaffirmed its dividend policy and planned investment planwhich includes the renewable hydrogen infrastructures contemplated in the final list of PCIs of the European Union, key to the European project of decarbonization, long-term security of supply and strategic autonomy.
Seven years of dispute
The dispute between Enagás and Peru dates back to late 2017when the GSP project, awarded three years earlier to a consortium in which the Spanish group participated, was paralyzed.
At the concession The Brazilian Odebrecht and the Peruvian Graña y Montero also participated.related to corruption cases in the South American country.
In 2018, given the impossibility of reaching a compensatory agreement, Enagás decided to resort to search for a solution before the ICSIDdependent on the World Bank.
Odebrecht had a 50% stake and Enagás and Graña y Montero each had a 25% stake in the GSP project, which represented approximately 1,000 kilometers of pipelines to transport gas and an investment of more than 7,000 million dollars (about 6,710 million euros).
Enagás claimed more than 500 million dollarsa figure that corresponded to both the recovery of the financial investment and the credit rights associated with the recovery of the guarantees executed as a result of the termination of the concession contract in GSP.
On repeated occasions, Enagás, which has always defended that it expected a favorable ruling in the arbitration it initiated against Peru for the GS paralysisP, has insisted on his availability to engage, from then on, in a process of dialogue and negotiation with the government of the Andean country.
The company, in its financial projections, expected to recover at least 236 million of euros before the end of the decade, leaving the rest for later.
The one from GSP It was not the only front that Enagás had open in Perusince the company has not been able to repatriate the dividends of its investee TGP for years, and it also went to ICSID a few years ago for this fact.
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