The Desertec Concept and the ICSID Convention - Investing into North African Solar Power - page 204

3.7.5 Desertec Concept and Contribution to the Economic
Development Element

There can be a lot of tensions between the state and a private operator in the field of
the service of general interest, as it is a core element of the state. This is mainly due
to the fact that the transfer of operation to a private operator includes a “loss of
sovereignty.” Since a lot of cooperation agreements are set up as concessions, this
difficult situation often applies to concession treaties. 593 ICSID case law indicates
that there seems to be no problem with large scale infrastructure projects and power
plants. This also finds some support within the literature. 594

3.7.5.1 Intentions of the Parties

First of all, the intentions of the parties might be relevant. Both parties have
different intentions if it comes down to an investment. The state party normally
desires as much contribution to its own economy, whereas the investor desires as
much profit as possible. Thereby, the investor is not as interested in the contribution
to the state, as long as the investment pays off.
As mentioned above, there have been some indicators that Dii plans to primarily
supply Europe and not the MENA region. Besides the existing figures, which only
deal with export to Europe, there are some Dii documents which can be interpreted
this way. Such an intention could already exclude the fulfillment of the requirement
contribution to the economic development of the host state. If the investor is not
planning to primarily contribute to the host state market, it is not considered to be an
investment according to the Salini test. There is a chance that this might also apply
to other investors. Any investor

s main goal would be to refinance its investment
and it is likely that this would be achieved by focusing on the European market.
However, the intention of the investor is not to evaluate whether the primary
source meets the Salini requirements. The state will always maintain its ground that
the primary goal of the investment must be to contribute to its economy. On the
other hand, the investor will try everything to keep its investment (e.g. power plant)
running. In the case of a solar thermal power plant, like the Desertec Concept, long-
term success is only possible if Europe is integrated into the grid. Therefore, the
intention of Dii was not as odd as it might seem. Furthermore, it can be very difficult
to prove the real intentions of the investor as it is rare to find a document evincing
it. The only real proof of the intention of the parties can be the concluded contracts
(e.g. concession and state contract). This is the “only” contract clarifying the
relationship between the investor and the state relating to all investment matters.
There might be other indicators, but

'

these might be only hearsay evidence.

593 Karl ( 2003 ), 37 (44).
594 Hauschka ( 2005 ), 1550 (1555).