EDPR plans legal action against new tax laws in Romania, Poland

Renewable power producer EDP Renovaveis SA (ELI:EDPR) plans to pursue all legal actions against the recently-introduced emergency clawback mechanisms in two of its markets – Romania and Poland.

The company’s majority owner, Portuguese utility EDP (ELI:EDP), said in a regulatory filing that the new legislations “do not follow the European Union Council principle of clawing back only realised market revenues as both ignore financial hedges in place within EDP.” This may lead to the cancellation of the effects of the existing risk management strategies adopted by renewable energy producers and the taxation of unrealised profits.

EDP estimates it could end up incurring roughly EUR 300 million (USD 315m) in costs this year because of the non-consideration of financial hedges.

“EDP will pursue all legal actions to contribute to the return to a fair rule of law that may support the much-needed investments in renewables in these countries and within the European Union,” the company concludes, after pointing out that the EU regulation stipulates that emergency cap mechanisms should only apply on realised market revenues, including hedging operations.

Presently, EDPR operates 521 MW of renewables in Romania and 697 MW in Poland.

(EUR 1 = USD 1.050)

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