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ENERGY LAW

305

electricity generation activities, during which period they must obtain the

necessary permits, approvals and licenses, as well as acquire ownership

or usufruct rights to the land where the generation facility is to be located.

The term of the preliminary license cannot be more than twenty-four

months excluding the occurrence of force majeure events. EMRA is

entitled to increase the preliminary license term by half, for a maximum

of thirty-six months, based on the energy source type and the facility’s

installed capacity.

The New EML stipulates that legal entities that could not obtain the

above-mentioned documents, certify the acquisition of the property or

usufruct rights, or fulfill the other legal requirements shall not be granted

a generation license. In addition, before a generation license is granted,

where there are any direct or indirect changes in the shareholding

structure (with the exception of inheritance), share transfers or non-

fulfillment of other legal requirements, the preliminary license will be

cancelled. Moreover, if the preliminary license term expires or the legal

entity holding the license files for or falls into bankruptcy, the preliminary

license will automatically become null and void. However, there is no

express provision in the new EML stating when the preliminary license

becomes null and void.

Distribution License Holders and Other Market Activities

As per Article 9 of the New EML, electricity distribution companies

can only operate in the territory indicated in their license, cannot conduct

activities other than distribution activities and cannot directly become

a shareholder in other legal active in the electricity market. Moreover,

while generation companies are prohibited from becoming controlling

shareholders under the Previous Law, the New EML completely prohibits

legal entities active in the electricity market from becoming direct

shareholders in a distribution company. As

argumentum a contrario,

indirect shareholding is not prohibited.

Supply License and Supply Companies

Wholesale and retail sale activities, which were regulated as different

types of licenses, “wholesale license” and “retail sale license”, under the