e-book2013

ENERGY LAW

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term of the preliminary license is twenty-four months

, and during this

term, all necessary permits, approvals to build and rights for the ownership

or use of the land where the generation facility is to be located must be

obtained.

The New EML stipulates that legal entities that fail to obtain the

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

or usufruct rights, or fulfill the other legal requirements within the given

term shall not be granted a generation license.

During the term of this preliminary license, there shall not be any

direct or indirect changes in the shareholding structure (with the exception

of inheritance). In case of a share transfer or non-fulfillment of other legal

requirements, the preliminary license will be cancelled. In addition, the

preliminary license will automatically become null and void upon the

expiry of the term or in the event of the filing for or actual bankruptcy of

the legal entity holding the preliminary license.

According to Temporary Article 10 of the New EML, generation

license applications not finalized by the Board as of the effective date of

the law shall be evaluated and finalized as preliminary license applications.

Conclusion

As explained above, the New EML sets forth the basic licensing rules

for electricity market activities. More detailed rules with respect to the

licensing will be established by secondary legislation.

Under the New EML, the most important new development regarding

licensing is the granting of a preliminary license for generation license

applications. This development received positive critique from the

market. On the other hand, the requirement of EMRA approval in cases

of share transfers or changes of control in licensee companies shows that

the strict monitoring of licensee companies by EMRA will also continue

under the New EML.

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.