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ENERGY REFORM IN THE DOMINICAN REPUBLIC: INVESTMENT AND RESTRUCTURING EXPERIENCE IN THE DOMINICAN REPUBLIC ELECTRIC SECTOR Amauris Vásquez Disla London,

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Presentation on theme: "ENERGY REFORM IN THE DOMINICAN REPUBLIC: INVESTMENT AND RESTRUCTURING EXPERIENCE IN THE DOMINICAN REPUBLIC ELECTRIC SECTOR Amauris Vásquez Disla London,"— Presentation transcript:

1 ENERGY REFORM IN THE DOMINICAN REPUBLIC: INVESTMENT AND RESTRUCTURING EXPERIENCE IN THE DOMINICAN REPUBLIC ELECTRIC SECTOR Amauris Vásquez Disla London, November 24th, 2014

2 K EY H ISTORIC F ACTS DATE Before 1954Private companies where responsible for generating, distributing and commercializing electricity 1954Rafael Trujillo (Dominican dictator) nationalized the electricity Company (Compañía Eléctrica de Santo Domingo) into a public Company called Corporación Dominicana de Electricidad (CDE) 1955-1990The Dominican electricity system was expanded through different plans which did not give the expected results 1990Energy crisis worldwide – great impact in the Dominican energy sector 1990-1999-Private companies were introduced to the electricity sector -Energy Reform – Capitalization process 1999-2013In this period most of the capitalization achievements were changed due to what have been called as electricity sector counter reform

3 Law 14-90 Incentive for National Electricity Development Enactment of Public Enterprises Reform Act (Law 141-97). CDEEE is created. Enactment of Electricity Law125-01. Renewable Energy Incentive Law The National Council for Energy is created under Decree148-93 E NERGY L EGAL F RAMEWORK 19901992 1993 19972001 2007 1993 Private Contracts (IPP’s) Electricity Reform (Capitalization)

4 R ELEVANT E NERGY L EGAL F RAMEWORK Law 125-01 Conventional Energy Production & Distribution Law 57-07 Renewable Energy Special Regime Law 112-00 Hydrocarbons Law S PECIAL M ANDATORY L ICENSES & P ERMITS

5 R EGULATORY L & P FOR THE G ENERATION OF E LECTRICITY Executive Power: 1.Definitive Concession: a) Enforcement Regulation of Electricity Law, Art. 70; Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law, Arts. 37 & 53. 2. Import Terminal License: a) Hydrocarbons Law No. 112. National Energy Commission: 1. Temporary Concession: a) Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law, Art. 24 2. Recommendation of Definitive Concession's Requests: Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law, Arts. 38; 46; 52 Superintendence of Energy: 1. Set up of electric works and services: a) Electricity Law, Art. 90; b) Enforcement Regulation of Electricity Law, Art. 146 2. Recommendation report of definitive concessions: a) Art. 21 b) Enforcement Regulation of Electricity Law c) Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law, Art. 38; 43 CDEEE: 1. Certification of No Objection to PPA: a) Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law, Art. 65 ETED: 1. Certification of No Objection to SENI Interconnection: Enforcement Regulation of the Incentives to Development of Renewable Energy Sources Law,

6 Agreement the use of Land for Superintendence of Electricity 1.Electricity Law - Arts. 72 – 75 2.(Peace Magistrate) Regulations on the Electricity Law Art. 125 National Energy Commission 1.(Peace Magistrate) Regulations for the Law on Incentives for the Development of Renewable Energy Sources and their Special Regimes - Art. 75 Regulatory P & L for Electricity Generation General P & L for any kind of Infraestructure Project Special P & L particular for each project given their geographic location Executive Power Superintendence of Electricity CDEEE ETED 1.City Hall / Chapter Hall 2.Enviromental License (MIMARENA) 3.Construction License (MOPC) 4.No Objection Certificate (MITUR) 5.Ministry of Industry and Commerce 6.Dominican Institute of Civil Aviation 7.Firefighters 8.Civil Defense 9.Port Authority 10.Navy 1.Project for the Development of Valle Juancho (PRODEVAJ) 2.Foundation for the Development of Samaná 3.Archaeological Institute of Dominican Man Museum / Cultural Heritage L OS C OCOS W IND P ROJECT G OVERNMENT L ICENSES AND P ERMITS Agreement the use of Land Superintendence of Electricity 1.Electricity Law - Arts. 72 – 75 2.(Peace Magistrate) Regulations on the Electricity Law Art. 125 National Energy Commission 1.(Peace Magistrate) Regulations for the Law on Incentives for the Development of Renewable Energy Sources and their Special Regimes - Art. 75 Regulatory P & L for Electricity Generation General P & L for any kind of Infrastructure Project Special P & L particular for each project given their geographic location Executive Power National Electricity Commission 1.City Hall / Chapter Hall 2.Environmental License (MIMARENA) 3.Construction License (MOPC) 4.No Objection Certificate (MITUR) 5.Ministry of Industry and Commerce 6.Dominican Institute of Civil Aviation 7.Firefighters 8.Civil Defence 9.Port Authority 10.Navy 1.Project for the Development of Valle Juancho (PRODEVAJ) 2.Foundation for the Development of Samaná 3.Archaeological Institute of Dominican Man Museum / Cultural Heritage

7 G ENERAL L ICENSES AND PERMITS FOR ANY I NFRASTRUCTURE P ROJECT Dominican Civil Aviation Institute Law No. 491-06 on Civil Aviation Firefighters Body Organic Firefighters Law No. 5110 Civil Defence Law No. 257 that creates the Civil Defence Office Port Authority Law No. 70 that creates the Port Authority Navy Organic Law of the Armed Forces of the Dominican Republic No. 873 City Hall/ Chapter Hall Law No. 675 on Construction and Public Ornaments and subsequent modifications by Law No. 6232 Environmental License/ MITUR Law No. 64-00 on Environment and Natural Resources Construction License/ MOPC Law No. 675 on Construction and Public Ornaments Law No. 687 on the Creation of an Engineering, Architecture and Related Systems No Objection Certification/ MITUR Organic Law on Tourism No. 541 Commerce and Industry Ministry Law No. 112 on Hydrocarbons

8 P OSSIBLE E NERGY R EFORM Reform to Law 57-07 of Renewable Energy in order to reintroduce the tax incentive (income tax) to renewable energy, eliminated by fiscal reform of 2012 Special permits (ventanilla única or one-window service) to incorporate all regulatory and filling registry Extrapolate the experience of efficient Isolated System (CEPM), which has a 99.1% rate of collection Currently, energy debts are personal responsibility of the client (“intuito personae”); its necessary to assign such debts also to the real state Enforce the technical tariff established by Law 125-01 in order to reduce the deficit of the sector Proceed with the international bid of the 3 distribution companies, currently under the control of the Dominican State

9 ADVICE TO POTENTIAL INVESTORS Discuss with all regulatory agencies the needs and their vision of the sector in order to avoid conflicting projects with the national agenda Currently the CDEEE does not applies the energy rates established by Law 57-07 for renewable energy producers; its advisable to discuss this issue for developing any business model If possible, find and select a strong local partner with experience in the energy sector Currently the CDEEE pays outstanding energy invoice to producers with 4 to 6 months delay; its necessary to take this issue into consideration for developing any business model

10 Thank you!! Amauris Vasquez Disla De Camps Vásquez & Valera avasquez@dcvlex.com


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