Environmental Engineering Reference
In-Depth Information
emissions, Morocco will also save money which it needs to import oil and produc-
tion of energy will be much safer and more reliable. A big scale plant or several
small scale plants create new jobs. It comes down on the issue of how much extra
money (besides the concession fee) Morocco must spend to keep the Desertec
Concept profitable. This is difficult to answer as individual preferences prevail.
Some might say that 10 % of the concession fee on top of the fee excludes a
contribution, and others might claim 50 %. Taking the importance and potential of
the Desertec Concept into account, these figures should be set at the higher end of
the percentage scale. The biggest gain from this project could be the replacement of
nuclear energy as the main energy source of the (developed) world. There are other
forms of renewable energy, but only solar thermal energy has the capability to
replace nuclear efficiently. The fact that the project will have a breakeven point in a
couple of decades also supports this assumption. Consequently, the figures should
be at 50-75 % of the concession fee as an additional subsidy. Beyond this point, it is
difficult to argue that the project is a contribution to the local economy.
If there is a financial support by third parties, these figures could be adjusted. So
far, ICSID tribunals have not been faced with this issue. Since ICSID tribunals do
not (officially) support renewable energies, their decision is likely to be “purely”
objective. This means that they are not going to rule in the favor of the project just
because of its status as renewable energy. ICSID case law shows no signals that
subsidies or any other support tool of the host state exclude a categorization as an
investment. The only difference is the certainty that the Desertec Concept is going
to need subsidies right from the start. Normally an investor builds a project and later
on finds out that it needs financial support. However, as long as the subsidies do not
completely consume all benefits from the concession fee and tax payments, there is
a great chance that ICSID tribunals will accept it as an investment, because it also
contributes to the economic development of the host state. Referring back to the
issue of public policy, the Desertec Concept would contribute financially and
economically to Morocco. In the case that an investor sticks to its plan to primarily
supply the MENA region; the Islamic community would profit. Consequently,
Islamic states would have the chance to generate an infinite amount of clean energy.
In summary, the Desertec Concept would not be put at risk due to public policy.
3.7.6 Assets Invested in Accordance with the Laws
of the Host State
The requirement of
has been around for
a long time within ICSID case law. However, it was mostly a question of the merits.
The Phoenix Action Ltd. v The Czech Republic tribunal was the first one to claim
that it is part of the definition of investment. Its relevance is also underlined by the
fact that Art. 12(d) of the MIGA Convention considers this as a part of the
subjective element of contribution.
in accordance of the laws of the host state
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