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 (b) Powers and capacity of the Government and Constitutional issues

Angola

(i) Governmental involvement

The Ministry of Energy and Water ("MEW") is the body of the Government that rules the Energy and Water sectors, being responsible for the development of their policies, planning, coordination, supervision and monitoring of activities related to recovery and rational use of national energy and water resources.

According to the General Law of Electricity the granting of a concession for production, transportation, distribution and marketing of power is the responsibility of the Council of Ministers while the granting of a license for the same purpose is the responsibility of local authorities, specifically the municipalities, according to the political-administrative division of the country.

(ii) Powers of Government

The powers of the Angolan Government are provided for in the Constitution and in the Government Organic Law, being the Ministry of Energy the government body responsible for implementing the national energy policy.

(iii) Powers in respect of the project

The Government shall enter into a concession or licensing agreement with a project company, which will grant special rights and duties to the project company. The Government will also be subject to special duties and have special rights deriving from the contract.

(iv) Power to contract

The Government has all necessary powers to enter into contracts on a commercial basis.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

There are no legislative restrictions applicable to the giving of sovereign guarantees by the Government.

Guinea

(i) Governmental involvement: which levels of Government will need to be involved in the Project, e.g. national/federal, state, local?

The involvement of the Government in the project is at a national level.

Powers of Government: briefly, how are the powers of the Government entities referred to in paragraph (i) derived (under statute?)

Power generator has to be undertaken under the form of the contractual provisions set out in the BOT Law (Law n*L/97/012/AN dated on 1st June 1998 - see above).

(ii) Powers in respect of the project: what are the powers vis-a-vis the Project and a project company?

The government issues all certificates, authorizations, attestations necessary for the project.

(iii) Power to contract: does the Government have the power to enter into the project documents to which it is party (and any direct agreement with the lenders relating to them) and perform its obligations thereunder?

The BOT convention concluded between the State and the investor must contain the general clauses which are defined by Decree approved by the Council of Ministers. The terms applicable to each BOT (or a variant on BOT operations) will be decided case by case.

(iv) Are there any legislative restrictions applicable to the giving of sovereign guarantees?

Government guarantees must be approved. The Guinean Government guarantees to the investor a to make up any shortfall in revenue in case the Government orders the services covered by the BOT Convention are sold at lower prices compared to those under the Convention.

Ivory Coast

(i) Governmental involvement

The Government of Ivory Coast will become involved with a power project at a national level. The authorities which are directly involved in the project are: the Ministry of Energy, ANARE (Autorite Nationale de Regulation du secteur electricite), SOGEPE (Societe de Gestion du Patrimoine du Secteur Electricite), SOPIE (Societe d'Operation Ivorienne d'Electricite) and the Investment Promotion Centre of Ivory Coast (CEPICI).

(ii) Powers of Government

The Government, represented by the Ministry of Energy, has the power to a authorise the award of the rights to develop a power project.

The Government of Ivory Coast has the power to determine the tariff for electricity for the project. The environmental rules on which the project has to comply are set out in Law n* 96-766 dated on 3rd October 1996 related to the Environmental Code.

(iii) Powers in respect of the project

The Ivory Coast Government launches the tender of process to award the concession of power generation projects. It issues all the authorizations related to a project. The powers of the Government are set out in the Law n* 85-583 dated on 29th July 1985 (see above).

(iv) Power to contract

The Ivory Coast's Government enters into the project, either directly, by enacting laws and regulations and setting tariffs for electricity or by way of entering into commercial contracts with the power developer.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

There is no legislation that would restrict the Government from granting sovereign guarantees in favour of a project.

Kenya

(i) Government involvement

The estimated time scale for the incorporation of a company in Kenya is approximately one month. The requisite filing fees payable to the Registrar of Companies are approximately K.Shs.3,000.00 (for a company with a Nominal Capital of K.Shs.100,000.00). In addition, stamp duty is payable on the nominal capital of the company at the rate of one per cent (1%).

(ii) Powers of Government

The Government derives its executive powers from the Constitution of Kenya. Most of the regulatory bodies are created by parliament and they derive their powers from statute. The Government has the authority to formualate policies regarding the production and supply of energy in Kenya.

(iii) Powers in respect of the project

The Government does not have the power to enter into contracts, pertaining to the generation of electricity, in which the Government is not involved contractually. Once the licences have been granted the parties operate independently of the Government.

As detailed below, the Government has not, in recent IPPs, provide any form of direct guarantee in respect of KPLC's payment obligations. The Government has, however, agreed to assume liability for certain political risks which could impact the project.

(iv) Power to contract

The Government has the power to enter into commercial contracts. The Government is afforded limited immunity in a civil trial. Where a judgement is obtained against the Government there are certain exclusions afforded to it in relation to the attachment of its assets, the relevant statute being the Government Proceedings Act (Cap 40).

(v) Legislative restrictions applicable to the giving of sovereign guarantees

The Guarantee (Loans) Act (Cap 461) stipulates that the Government is precluded from giving soveriegn guarantees withouth the approval of parliament. On recent IPPs, a sovereign guarantee has not been provided, but Government has assumed liability for certain political risks which could impact the project.

Madagascar

(i) Governmental involvement

The Governmental involvement is national. The relevant authorities are: the Ministry of Energy and Mines (for the concession), The Ministry of Environment (for the Environment Permit), Ministry of Civil Service and the Ministry of the Public Work (for the Construction Permits). The Regional and Communal authorities will also need to be involved.

(ii) Powers of Government

Specific rules relating to electricity are set out in the Electricity Code, and rules relating to environmental control are set out in the MECIE Decree.

(iii) Powers in respect of the project

The Government gives the authorisation and issues the licence to the project company. The licence is approved by government decree.

(iv) Power to contract

The Government has the power to enter into the project documents following the Electricity Code. It will set up a tender related to the electricity generation and/or distribution, and fix the conditions and the technical specification. The Government is represented by the Ministry of Energy and Mines, which is the decision-making authority. The authorisation or the concession may be subject to mortgage, transfer and/or pledge.

(v) Are there any legislative restrictions applicable to the giving of sovereign guarantees?

The Government may guarantee the obligation of Jirama, subject to approval of the council of Ministers.

Mali

(i) Governmental involvement

The authorities involved in a power project include: Ministry of Energy, Ministry of Environment, the Regulatory Commission of Electricity and Water (CREE) and the Territorial community where the project is implemented.

(ii) Powers of Government

The Malian Government has the power to grant an authorisation of power generating or to conclude a concession convention with the project company. The powers of the Malian Government on the project are set out in the Ordinance n*00-019/P-RM dated on 15th March 2000 (see above).

(iii) Powers in respect of the project

The Government's power vis-a-vis the Project and the project company are set out in the Ordinance n*00-019/P-RM dated on 15th March 2000 (see above).

It issues the licences and authorisations related to the project and approves the Investment Plan of the project.

(iv) Power to contract

The Government has the power to enter into the Concession to which it is party. The Ordinance n*00-019/P-RM dated on 15th March 2000 (see above) sets out the terms of the concession agreement. The Government is represented by the Ministry of Energy and the CREE which make the decision related to the power project.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

There are no laws or regulations applicable to the giving of sovereign guarantees.

Mauritius

(i) Governmental involvement: which levels of Government will need to be involved in the Project, e.g. national/federal, state, local?

Until the EA 2005 is proclaimed, the CEB is the regulatory body in connection with such projects.

When the EA 2005 is proclaimed, the URA will take over the role of the CEB which shall be responsible for issuing licenses as mentioned above and act as regulatory body of the licensees.

(ii) Powers of Government: briefly, how are the powers of the Government entities referred to in paragraph (i) derived (under statute?);

Please refer to the response in paragraph 1.2 (d) (i) above.

(iii) Powers in respect of the project: what are the powers vis-a-vis the Project and a project company?;

Please refer to previous responses.

(iv) Power to contract: does the Government have the power to enter into the project documents to which it is party (and any direct agreement with the lenders relating to them) and perform its obligations thereunder?

The Government has the capacity to enter into such.

(v) Are there any legislative restrictions applicable to the giving of sovereign guarantees?

There are no legislative restrictions in respect of sovereign guarantees.

Morocco

(i) Governmental involvement

National.

(ii) Powers of Government

The ONE has monopoly in the production of energy in the KoM.

(iii) Powers in respect of the project

ONE is a major player in any energy project.

(iv) Power to contract

The KoM has the power to enter into contracts on a commercial basis.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

The KoM is free to enter into sovereign guarantees.

Mozambique

(i) Governmental involvement: which levels of Government will need to be involved in the Project, e.g. national/federal, state, local?

The Project will require the intervention of different levels of Governmental, Provincial and/or Local entities depending on the installed capacity of the facility. Thus, the concession shall be granted either by the Provincial Governors, the Ministry of Energy (“ME”) or the Council of Ministers.

On the other hand, some actions will also require the intervention of other national entities – e.g. CNELEC and Administrative Court – and/or local authorities, including local communities’ leaders. Please refer to our response below.

(ii) Powers of Government: briefly, how are the powers of the Government entities referred to in paragraph (i) derived (under statute?)

As per the Electricity Law, the production, transmission, distribution, supply, trade, import or export of electric power, as well as the construction, operation or management of power facilities, are subject to prior authorization by means of a Concession granted by the State.

As a general rule, the governmental authorities with powers to approve power projects vary according to the installed capacity of the facility, as follows:

Council of Ministers - => 100 MW;

ME - between 1 MW and 100 MW[1];

Provincial Governors - < 1 MW[2]

(iii) Powers in respect of the project: what are the powers vis-à-vis the Project and a project company?

Apart from the licensing powers by means of granting a Concession as set out in (d) (ii) above, the Government has also supervision powers being, therefore, responsible for verifying the (i) the compliance with legal requirements, (ii) the fulfilment of concessionaire’s duties set out either in the Concession Contract or in the relevant investment project approved, if any.

(iv) Power to contract: does the Government have the power to enter into the project documents to which it is party (and any direct agreement with the lenders relating to them) and perform its obligations thereunder?

Yes, the Government has the power to enter into the project documents, including commercial contracts on a commercial basis, as well as to perform its obligations thereunder.

(v) Are there any legislative restrictions applicable to the giving of sovereign guarantees?

The Civil Procedure Code sets forth certain restrictions applicable to the giving of sovereign guarantees by the Government, notably as regards certain assets and/or rights which may not be pledged.

Moreover, in practice, sovereign guarantees granted by GoM shall require prior authorization from the World Bank / FMI under the negative pledge provisions set out in the agreements entered into between GoM and the Wold Bank / FMI.



[1] The ME may delegate this power to relevant local authorities whenever both the following situations are met (i) when the installation is confined to the area of jurisdiction of the relevant authorities and is not connected to other power facilities located outside the jurisdiction’s area limits and (ii) when the installed capacity does not exceed 10 MW.

 

 

[2] And whenever the ME delegates its powers as mentioned in reference 1 above.

Niger

(i) Governmental involvement: which levels of Government will need to be involved in the Project, e.g. national/federal, state, local?

The involvement of the Government on the project is at a national level.

The authorities which are directly involved in a power project are: the Ministry of Energy and Mine, the “Autorité de Régulation Multisectorielle” (“Multi-Sector Regulation Agency” or “ARM”), and the National Committee of Electricity (CNE).

(ii) Powers of Government: briefly, how are the powers of the Government entities referred to in paragraph (i) derived (under statute?)

The Government has the power to conclude the Concession for power generating.

The Law n°2003-004 dated on 31st January 2003 (see above) sets out the power of the Government of Niger on the project. The environmental rules on which the project has to comply are set out in the Environmental Code dated on 29th December 1998.

(iii) Powers in respect of the project: what are the powers vis-à-vis the Project and a project company?

The Government launches the tender of process for the attribution of the power Generating Project. It issues all the licences and authorizations related to the realisation of the Project. The powers of the Government of Niger vis-à-vis the power project are set out in the Electricity Code (see above).

(iv) Power to contract: does the Government have the power to enter into the project documents to which it is party (and any direct agreement with the lenders relating to them) and perform its obligations thereunder?

The Government has the power to enter into the Concession to which it is party. After the approval of the ARM, the terms of this Concession are taken on Council of Ministers and approved by Decree. The Decree n°2004-266/PRN/MM/E dated on 14th of September 2004 sets out the power of the Government to enter on the project documents.

Note that the Government is represented by the Ministry of Energy and Mine and the ARM which is a decision maker on the project documents.

(v) Are there any legislative restrictions applicable to the giving of sovereign guarantees?

There are no laws or regulations related to the giving of sovereign guarantees.

 

Nigeria

(i) Governmental involvement

As discussed above, a power project may or may not involve direct Government participation i.e. a public-private partnership or a wholly private project.

However, there is always a measure of Governmental control of such projects through its relevant regulatory agencies including the NERC, the Ministry of Power, the Power Holding Company of Nigeria, the NOTAP, the Ministry of Environment and the National Assembly which retains the power to legislate over GTSODT operations in the country (Section 13, Constitution of the Federal Republic of Nigeria Act CAP C23 LFN 2004 (�Nigerian Constitution�)).

Please note also that by virtue of Section 13 and Item 14, Part II � Concurrent Legislative List of the Nigerian Constitution, State Governments also have the power to legislate on the various components of the provision of electricity within the State such that apart from the obligations imposed upon a licensee under the EPSRA, the exercise of this power by the State may introduce new and unforeseen obligations to be performed on the part of a licensee, and which may impact the power project. Conflict is however avoided by confining the legislative power of each State of the Federation to GTSODT activities within their territories and to Off-grid electrification programmes.

On the issue of States� power to legislate on electricity, please note further that in the event of any conflict, Federal Laws override conflicting State Laws, which become void to the extent of their inconsistency. More so, in practice, the States do not contend with the Federal Government in power sector regulation. In fact, so far, the Electricity Boards set up by some State Governments only focus on the state�s electrification programmes and are in most cases only involved with off-grid power generation and distribution in areas where the national electricity regulatory authority is not operational.

(ii) Powers of Government

Please see previous responses.

(iii) Powers in respect of the project

The Government where it decides to directly participate in the project will remain a contractual party in accordance with the terms of such participation agreement.

(iv) Power to contract

The Federal Government has the power to enter into contracts on a commercial basis with local or foreign counterparties or on its own in respect of which its obligations may be enforced against it.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

There are no legislative restrictions applicable to the giving of sovereign guarantee and as such, the Government may give sovereign guarantees to its partners in relation to power projects. Whilst the Government appears generally averse to providing such support/guarantees, it may be favourably disposed towards the giving of such guarantees in relation to power projects in view of the priority status presently accorded to the power sector.

Please note however that the judicial trend in Nigeria tends to show that these instruments remain contentious, and the chances of their enforcement low, as their stipulation in contractual arrangements is generally perceived as running against the doctrine of the fetter of statutory powers and the public interest/public policy principle.

South Africa

(i) Governmental involvement

Power is dealt with at a national level, by the DoE and by Eskom (at present). Municipalities have the right to enter into contracts in respect of the supply to them of power. However, the power sector in South Africa is presently being restructured and the identities of the entities involved at a national level could change in the near future.

(ii) Powers of Government

The powers of DoE and the municipalities are derived from the Constitution of the Republic of South Africa. The powers of Eskom are derived from the Eskom Conversion Act.

(iii) Powers in respect of the project

The DoE and Eskom do not have any direct powers in respect of a project or a company. All parties to a power project will be required to comply with the applicable legislation and failure to comply with that legislation may result in a criminal offence and prosecution for such offence.

(iv) Power to contract

The Government (both national and municipal) and Eskom have the power to enter into the project documents to which they are party (and any direct agreement with the lenders relating to them) and to perform their obligations thereunder. However, the various applicable pieces of legislation require the approval of various functionaries (for example, National Treasury's approval is required in respect of financial commitments by DoE and the town council's approval is required in respect of commitments by a municipality) and often (particularly in respect of municipalities) require various procedures to have been followed before contracts become binding. It is essential that these procedures be followed and approvals are obtained as the high court has struck down contracts that have failed to comply with such procedures or to obtain the relevant approvals.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

The Government (both national and municipal) and Eskom have the power to enter into the project documents to which they are party (and any direct agreement with the lenders relating to them) and to perform their obligations thereunder. However, the various applicable pieces of legislation require the approval of various functionaries (for example, National Treasury's approval is required in respect of financial commitments by DoE and the town council's approval is required in respect of commitments by a municipality) and often (particularly in respect of municipalities) require various procedures to have been followed before contracts become binding. It is essential that these procedures be followed and approvals are obtained as the high court has struck down contracts that have failed to comply with such procedures or to obtain the relevant approvals.

Whilst there are there no legislative restrictions applicable to the giving of sovereign guarantees, there are various procedures that need to be followed and consents that need to be obtained under the Constitution of the Republic of South Africa and the Public Finance Management Act in order for valid sovereign guarantees to be issued. In the past, the South African government has refused to guarantee the obligations of Eskom. It is anticipated that this stance will change in the near future.

Tanzania

(i) Governmental involvement

The Minister for Energy must supervise and overview the electricity supply industry in certain specified matters including taking all necessary measures to reorganise the electricity sector to attract the private sector and any other function as he may deem necessary.

(ii) Powers of Government:

The Government has wide ranging powers to enter into contracts in the energy sector, and may enter into an implementation agreement and in certain limited circumstances may give guarantees in relation to the project agreements. However, for instance if special exemptions are required for the project, then the consent of Parliament may be required.

(iii) Powers in respect of the project

The Government may in certain limited circumstances enter into project support agreements to promote the project.

(iv) Power to contract:

There are no statutory laws within Tanzania that suggest that the Government cannot be party to or enter into a contract on its own behalf.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

The government can only give guarantees in certain limited circumstances.

Uganda

(i) Governmental involvement

Uganda is a unitary state. The overall responsibility for energy production and policy in Uganda is with the Government of Uganda and directly under the Ministry of Energy and Mineral Development.

(ii) Powers of Government

These are derived under Acts of Parliament and the Constitution of the Country.

(iii) Powers in respect of the project

The Government has in certain instances given undertakings in support of energy projects.

(iv) Power to contract

The Government of Uganda has the power to enter into contracts on a commercial basis.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

The Government of Uganda may only enter into sovereign guarantees in certain restricted circumstances.

Zambia

(i) Governmental involvement

Government involvement is done through the Ministry of Energy and Water Development ("MOEWD"). MOEWD established the Office for Promoting Private Power Investment ("OPPPI") in 1999 to encourage the involvement of private participants in the Zambian energy sector, as well as to facilitate a competitive energy market. OPPPI was established by GRZ within the MOEWD as a unit with responsibility for the fast track facilitation of private sector participation in the Zambian energy sector.

(ii) Powers of Government

The Government has influence to provide incentives and facilitation of power project following its policy to encourage private participation in power projects, through the OPPPI.

(iii) Powers in respect of the project

The Government through the Ministry of Commerce Trade and Industry will enter into implementation or investment promotion agreement which will provide certain rights to the project company.

(iv) Power to contract

The Government has the power to enter into commercial contracts.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

There are restrictions on the number of guarantees that can be issued in one particular year.

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