MADRID, June 5 (Reuters) - The Spanish government has

agreed to pay 32 million euros ($37 million) to a U.S. fund to

end a legal dispute tied to renewable energy subsidies that were

cut over a decade ago, an Energy Ministry spokesperson said on

Thursday.

Foreign investors, mostly investment funds, took legal

action against Spain after the previous conservative government

cut renewables subsidies in 2013 to reduce a power tariff

deficit built up through years of artificially low prices.

U.S. fund Blasket Renewable Investments had acquired the

rights to the award from Japan's JGC Holdings Corporation ( JGCCF ), which

won it under a 2021 ruling by the World Bank's International

Centre for Settlement of Investment Disputes.

In 2024, the court shot down Spain's attempt to annul the

decision.

Since the arbitration proceeding was from a non-EU investor,

the payment doesn't clash with a March decision by the European

Commission that told Spain not to pay up in a similar case as it

would be a breach of EU state aid rules - which prevent

governments from giving unfair advantages to one firm over

competitors.

Cases from non-EU investors represent only 5% of the total,

the spokesperson said, adding that Spain continued to pursue all

legal avenues to defend its interests.

So far, Spain has been ordered to pay around 1.5 billion

euros in various cases and the country has been able to reduce

by 85% the amount demanded by investors, the spokesperson said.

($1 = 0.8754 euros)