The new Electricity Law (Law no. 12/2022 of 11 July), entered into force on the 9 th 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the impact it will have on the rights acquired in relation to the Concessions granted under the regime of the now repealed Law 21/97 of 1 October ("former Electricity L Contact online >>
The new Electricity Law (Law no. 12/2022 of 11 July), entered into force on the 9 th 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the impact it will have on the rights acquired in relation to the Concessions granted under the regime of the now repealed Law 21/97 of 1 October ("former Electricity Law").
ARENE was established by Law 11/2017 of 8 September passed by the Parliament of Mozambique. Related to electricity, natural gas and fuel, ARENE has the following responsibilities: – Regulate the subsectors (licensing, tariffs, quality standards and competition); – Ensure compliance with terms and conditions of concession contracts
The government view energy exports as a key driver of the Mozambican economy, having passed a new electricity law that simplifies permitting and encourages IPPs activities. The government also passed a law exempting VAT on the import of electrification equipment.
The prevailing legal instrument for electrification in Mozambique was the Electricity Law from 1997 (Law n.° 21/97) which has been updated in July 2022 to Law n.º 12/2022 to reflect the current social, technical and financial dynamics in Mozambique, with a emphasis on renewables. This law defines the general framework of the power sector and
The long-awaited reform of Mozambique''s electricity law has reached the statute books this winter in Maputo (summer if you''re in the Northern Hemisphere), with the enactment of Law 12/2022 of 11 July (the New Electricity Law). It is early to know how impactful the changes it brings will be.
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Article by Gisela Graça andMayara Miquidade, CGA Associados, Mozambique
The new Electricity Law (Law no. 12/2022 of 11 July), entered into force on the 9th 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the impact it will have on the rights acquired in relation to the Concessions granted under the regime of the now repealed Law 21/97 of 1 October (“former Electricity Law”).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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This articles provides an overview of the different policies and energy access strategies for electrification and renewable energy in Mozambique.
The prevailing legal instrument for electrification in Mozambique was the Electricity Law from 1997 (Law n.° 21/97)[1] which has been updated in July 2022 to Law n.º 12/2022 to reflect the current social, technical and financial dynamics in Mozambique, with a emphasis on renewables. This law defines the general framework of the power sector and all activities related to production, distribution, transmission, consumption and storage of electricity, including export and import.[2]
In December 2021, a new Regulation for Energy Access in Off-grid Areas[3] was published and approved. This new regulation, active since January 24th, 2022, acts as support to the current legal framework in the off-grid energy sector in Mozambique. It is expected that this new framework:
ARENE, the Energy Regulation Authority (Autoridade Reguladora de Energia), has the role of handling and coordinating all processes regarding approval for concessions before and after they have been submitted to the Minister for approval.
In May 2023, a resolution to this decree was approved which specifies the regulations for interconnection of mini-grids to the national grid, the regulations to standarise the tariff of energy supplied through mini-grids in off-grid areas, the regulation for technical and safety standards, and the regulation for quality of service and commercial relations. The regulation for concessions and a certified model for energy service providers are yet to be published[4].
Another important energy policy document that states the needs of energy access for the population and the productive sectors is Mozambique''s Energy Policy from 1998. Some of its main objectives are to promote economically viable programmes for the development of energy resources, ensure reliable energy supply, and to improve energy access in the domestic sector[5]. The specifics on the implementation of the policy are better described in Mozambique''s National Electrification Strategy, updated from the Energy Sector Strategy written in 2000.
The following table shows the relevant regulations involved in the improvement of energy access in Mozambique.
These initiatives are based on Sustainable Development Goal (SDG) 7. Read here more about SDG 7 and how energy contributes to the achievement of other SDGs
Below is a description of the most important plans and strategies active in 2021. For more information, consult the links to each strategy.
The main objective is to formulate a comprehensive 25 year national power system development plan for the period between 2018 and 2043, and to make it possible for governmental agencies to have access to the technical information on the planning of power generation, transmission and distribution[8]. The plan forecasts a growth on electricity demand in 2043 from 3908 GWh to 35444 GWh and a growth in maximum installed capacity from 655 MW to 5950 MW. With a close cooperation with FUNAE, EDM plans to increase the number of electrified households from 1.3 million in 2017 to 4.6 million by 2043[8].
About Maputo electricity regulations
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