Winds of Corruption
Getting Reputational Due Diligence Right in the Spanish Renewables Sector
Spain’s renewable energy sector is an indisputable European success story. In 2024, the country launched 54 new renewable energy projects, ranking third globally behind the U.S. and the U.K..
This rapid expansion of renewables has revolutionised the country’s energy mix, with renewable sources accounting for 56% of all electricity production in 2024.
According to Global Energy Monitor, the country has 30 GW of utility-scale solar capacity in operation, with an additional 7.8 GW under construction and 106.1 GW in early development—more than the combined capacity of the next three largest European markets.
This boom has attracted major international and domestic investors, creating battleground for energy giants, oil companies, international investment funds, and Gulf sovereign wealth funds, all vying for a stake in Spain’s renewable future.
According to Spain’s business daily Expansión, nearly half of the 31,500 MW authorized for large-scale solar and wind projects are controlled by foreign companies. Italian giant Enel leads the way, followed by France’s TotalEnergies and Austria’s Verbund AG. Other key investors include Swiss fund SmartEnergy, British BP, and Japan’s Orix Group. Among Spanish firms, Iberdrola and Capital Energy stand out, along with high-profile investors such as Enrique Díaz-Tejeiro (Solaria) and Jesús Martín Buezas (Capital Energy).
Corruption Risks in the Spanish Renewables Sector
Despite Spain's rise as a renewable energy powerhouse, the sector has not escaped association with a persistent issue affecting large infrastructure projects in the country – corruption.
In 2015, a report from Spain’s tax agency revealed evidence of commission payments made to expedite wind farm approvals in Castilla y León. Investigators estimated that around €110 million in bribes were involved, implicating both major electricity companies and shell firms set up to access public subsidies. The report also uncovered that some current and former regional officials held shares in newly created companies that quickly received wind energy subsidies, only to later sell them at significant profits.
Fast forward ten years, and the case remains unresolved. The trial for the 'Trama Eólica' (Wind Farm Plot), regarded as the largest corruption case in Castilla y León, is scheduled to begin later in 2025.
The court will examine alleged bribes totalling approximately €75 million, which were distributed among businessmen and former officials of the Junta de Castilla y León between 2000 and 2015. The main defendant is former Deputy Minister of Economy Rafael Delgado, for whom the prosecution is seeking a 42-year prison sentence and fines totaling €239 million. Delgado was recently convicted of misconduct in another corruption case known as 'Perla Negra.'
These allegations of bribery and influence-peddling extend beyond electricity providers to intermediary firms and individuals within regional administrations, raising concerns over whether bribes have been used to fast-track approvals for renewable projects.
For foreign investors entering Spain’s renewables market, involvement in a corruption scandal presents substantial risks. Beyond the immediate financial implications of potential fines and legal entanglements, these allegations could tarnish a firm's reputation with a potential knock-on effect on a firm's operations elsewhere.
To guard against this from happening it is vital that companies have in place effective reputational due diligence programmes to understand the risks associated with their potential business partners.
How Sagrada Due Diligence Can Help
At Sagrada Due Diligence, we conduct discreet, targeted interviews with market sources as part of a comprehensive reputational due diligence screening service.
Our goal is to evaluate the background, reputation, track record, character, and credibility of any potential business partner, whether an individual or entity. We provide nuanced, context-rich intelligence to ensure informed decision-making.
For more information on how we can assist you in making informed decisions, visit our website.
www.sagradaduediligence.com