Foreign investors in Spanish renewable energy projects are looking to bring legal action against the government over new rules they say break the terms of their investment, Reuters has exclusively revealed.

The Spanish Parliament recently approved a law that cuts subsidies for renewable energy technologies, marking a significant u-turn on its long-standing green power push.

Investors fear that this latest legislation, along with other recent laws, will virtually wipe out profits for photovoltaic, solar thermal and wind power plants.

Reuters reports that investors from the US, Japan and the United Arab Emirates are among those pursuing action through the Brussels-based Energy Charter, an internationally ratified treaty that binds members to rules on energy and arbitration.

Spain’s Industry Minister Jose Manuel Soria has defended the law, saying that the measures were necessary to eliminate the EUR28bn tariff deficit in the electricity system, which had accumulated through years of subsidies.

It is not known what the claims might be worth, but international funds are thought to hold more than EUR13bn ($17bn) of renewable energy assets in Spain.

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