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The New Electricity Law: recognition of acquired rights with respect to existing Concessions and projects authorised under the previous law

Article by Gisela Graça and Mayara Miquidade, CGA Associados, Mozambique

The new Electricity Law (Law no. 12/2022 of 11 July), entered into force on the 9e of October 2022. It is important to understand the impact it will have on the rights acquired in relation to the Concessions granted under the regime of the now repealed Law 21/97 of 1 October (“former Electricity Law”). It is also  important to understand the treatment that the new Electricity Law gives to projects authorised under the former Electricity Law but whose implementation has not yet begun.

The Electricity Law respects the principle of non-retro-activity of the law, expressly provided in article 58(1), that the holders of concessions for the supply of electricity existing at the date of entry into force of the Electricity Law shall maintain the rights and obligations contained in the respective concession contracts for the periods defined therein, without prejudice to compliance with this Law and regulations in all matters applicable for the future.

It should be noted, however, that the recognition of the rights acquired by the holders of concessions is not automatic. According to article 58(3), the recognition is conditioned to the presentation, by the holder of the Concession, through a process instructed by the Energy Regulatory Authority (“ARENE”), of documentation proving the exercise of the activity of electricity supply, within 180 days from the date of entry into force of the new Law.

The same principle applies to all persons and entities, whether governed by public or private law, who are currently carrying out electricity supply activities without the respective concession or under an open-ended concession, who must also regularise their situation with ARENE within 180 days from the date of entry into force of the law.

Furthermore, according to article 58, paragraphs 4 and 5 of the new Electricity Law, all promoters of projects authorised under the old Electricity Law, which have not yet started the implementation of the project, or whose works are delayed, in relation to the deadlines provided for in the respective Concession, shall submit to ARENE, within 180 days from the date of entry into force of the new Law, a project implementation schedule. Said schedule shall include the technical plan and financial implementation plan, as well as the project completion schedule, with a view to the commencement of commercial operation. Failure to comply with these requirements will result in the termination of the corresponding Concession.

Lastly, as a result of article 58(8) of the new Law, authorisations to conduct technical studies and other investigations authorised under the former Electricity Law, shall remain valid for the period provided for therein, and any extension shall be made in accordance with the new Electricity Law.

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