Energy Sector Licensing Requirements and Regulatory FeesThe Council of Ministers <a href="https://api.mekdesmezgebu.com/uploads/PEA_Fee_Regulation_No_558_2024_ab3dd23535.pdf">Regulation No. 558-2024</a> outlining the fees payable to the Petroleum and Energy Authority (“PEA”) for its licensing and regulatory services (“Fee Regulation”) recently came into effect. &nbsp;The new Fee Regulation introduces various categories of licensing along with the applicable fee rates. It also expands the licensing fees previously set out in&nbsp;<a href="https://api.mekdesmezgebu.com/uploads/energy_regulation_447_2019_662707657d.pdf">Energy Regulation No. 447/2019&nbsp;</a>(“Energy Regulation”). In this edition of our insights, we provide a summary of the energy sector's licensing requirements and the regulatory fees provided under the new regulation. &nbsp;LicensingUnder the&nbsp;<a href="https://api.mekdesmezgebu.com/uploads/Energy_Proclamation_810_2013_62d8485fb6.pdf">Energy Proclamation</a>, no individual or entity may generate, transmit, distribute, sell, import, or export electricity for commercial purposes without obtaining a license from the PEA. Licenses are also required for buisnesses involved in energy auditing, energy efficiency, conservation, contracting, and consultancy services. Additionally, PEA grants certificates of professional competency to individuals and companies engaged in electrical work. Anyone conducting these activities without a proper license risks facing penalties, including rigorous imprisonment of up to ten years, fines of up to 50,000 Birr, or both.In issuing licenses and certificates, the PEA typically charges fees set by regulation. In addition to licensing fees, the PEA imposes regulatory service fees on the electricity sector, primarily charged to end customers. Under the Energy Regulation, these fees were set at 0.117 per MW/year. However, the new Fee Regulation has changed the computation and increased the regulatory service fee to 0.5% of each kilowatt of electricity sold. &nbsp;License holders are now required to collect and pay these regulatory fees to the PEA every month.Electricity Generation, Transmission and Distribution/Sale Licensing &nbsp;The PEA Directive on the Issuance of Licenses for Electricity Supply in the National Grid&nbsp;<a href="https://api.mekdesmezgebu.com/uploads/ESCO_Directive_2020_bdc5bf7093.pdf">No. 007/2020</a>, outlines the detailed requirements that developers must fulfil to obtain a license to generate, transmit, distribute and sell electricity. Applicants for a license must submit commercial and tax registration certificates, ownership and corporate structure, financial capability and financial model, feasibility studies and business plans, generation plant technology, environmental impact assessment and authorization etc..&nbsp;In terms of licensing fees, previously, license fees were regulated under the Energy Regulation. With the introduction of the new Fee Regulation, the following fee adjustments were made:&nbsp;<figure class="table"><table><tbody><tr><td>License type&nbsp;</td><td>Previous Service Fees</td><td>New Service Fees</td></tr><tr><td>Generation, Transmission, distribution and sales license application fees&nbsp;</td><td>496 Birr (∼$4)&nbsp;</td><td>818 Birr (∼ $7)&nbsp;</td></tr><tr><td>Generation, Transmission, distribution and sales license issuance fees</td><td>&nbsp;</td><td>&nbsp;</td></tr><tr><td>Up-to 10MW</td><td>2,500 Birr (∼$22)</td><td>4,125 Birr (∼$13)</td></tr><tr><td>Above 10MW</td><td>6,883 Birr (∼$61)</td><td>11,360 Birr (∼$101)</td></tr><tr><td>Generation, Transmission, distribution and sales license renewal fees</td><td>&nbsp;</td><td>&nbsp;</td></tr><tr><td>Up-to 10MW</td><td>-</td><td>1,668 Birr (∼$14)</td></tr><tr><td>Above 10MW</td><td>-</td><td>4,595 Birr (∼$41)</td></tr></tbody></table></figure>Energy Service Company (ESCO) LicensingAn Energy Service Company (ESCO) is a business that offers energy efficiency services in customer facilities or premises and bases its payment, fully or partially, on achieving energy efficiency improvements. These services are typically offered to industries, buildings, and premises. ESCOs perform tasks such as investigation, consulting, design, construction, installation, rehabilitation, maintenance, management, and monitoring of machinery, facilities, or buildings, all aimed at reducing energy consumption while maintaining or enhancing energy service levels. The PEA&nbsp;<a href="https://api.mekdesmezgebu.com/uploads/ESCO_Directive_2020_bdc5bf7093.pdf">Directive No. 006/2019</a> provides the documentation requirements for ESCOs to qualify for licensing by the PEA. Among others, ESCOs must hire an energy auditor recognized by the PEA to carry out energy auditing activities. Moreover, ESCOs must demonstrate sufficient capabilities to undertake energy efficiency services and must be equipped with the listed equipment provided in the directive.&nbsp;Previously, the Energy Regulation determined the applicable fees for ESCO licensing. While the Fee Regulation does not expressly repeal the rates provided in the Energy Regulation, it provides new fee ratee as described in the table below. &nbsp;&nbsp;<figure class="table"><table><tbody><tr><td>License Type&nbsp;</td><td>License Category &nbsp;</td><td>Previous Service Fees</td><td>New Service Fees</td></tr><tr><td rowspan="3">&nbsp;ESCO</td><td>Application Fee</td><td>68 Birr</td><td>120Birr</td></tr><tr><td>License Fees</td><td>163 Birr</td><td>270 Birr</td></tr><tr><td>License Renewal Fees&nbsp;</td><td>40.75 Birr&nbsp;</td><td>100 Birr</td></tr><tr><td rowspan="3">Energy Auditors</td><td>Application Fee</td><td>321.5 Birr&nbsp;</td><td>540 Birr</td></tr><tr><td>License Fees</td><td>402 Birr</td><td>665 Birr</td></tr><tr><td>License Renewal Fees&nbsp;</td><td>142 Birr</td><td>240 Birr&nbsp;</td></tr></tbody></table></figure>Competence Certification&nbsp;Under the Energy Regulation, no individual or business may engage in electrical work without first obtaining a competence certification from the PEA. Electrical work includes services such as electrical design, installation, maintenance, testing, inspection, contracting, consulting, and electromechanical activities. The PEA Electric and Electric-Related Business Sectors Competency Certificate Amendment Directive No.1/2018 outlines the detailed requirements for obtaining electromechanical competence certification.Professionals and companies involved in these activities must ensure their staff are certified by the PEA. The certification process includes written examinations to determine the certification grade. Applicants are required to pay fees for registration, theoretical and practical examinations, certification, and renewal. The new Fee Regulation introduces updated rates for the training and certification services provided by the PEA and offers an expanded list of services related to competence certification, with corresponding fees listed in <a href="https://api.mekdesmezgebu.com/uploads/PEA_Fee_Regulation_No_558_2024_ab3dd23535.pdf">Tables 3-5</a>.&nbsp;In summary, the Fee Regulation introduces updated fees for the services provided by the PEA, including new categories and increased rates for various licensing and certification services. The regulation consolidates the fees related to electricity generation, transmission and distribution licenses, competence certifications, energy service companies (ESCOs), energy auditors, and other energy sector activities. However, the regulation does not repeal fees provided in the existing Energy Regulation, leaving certain overlapping fee structures in place, which may have been an oversight in the drafting process.

Energy Sector Licensing Requirements and Regulatory Fees

A new regulation to determine regulatory and licensing fees 

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Energy Sector Licensing Requirments and Regulatory Fees.png

Ethiopia’s Year in Review: Legislative Highlights   

Ethiopia’s Year in Review: Highlights of New Legislation

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2016 In Review - .png

Ethiopia’s New Personal Data Protection Proclamation No.1321/2024&nbsp;In July 2024, the Personal <a href="https://api.mekdesmezgebu.com/uploads/Personal_Data_Proclamation_1321_2024_26c6d0c024.pdf">Data Protection Proclamation No. 1321/2024</a> came into effect providing the first comprehensive legislation dealing with individuals' rights to privacy. The Proclamation will survive the person's death and will remain valid for ten years after the death. Below, we provide a brief summary of the law.&nbsp;Scope of Protection&nbsp;The Proclamation protects the personal data of individuals, defined as information relating to any identifiable nature of a person, directly or indirectly. It includes a name, identification number, location data, an online identifier, or one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.&nbsp;Moreover, certain data categories are defined as “sensitive personal data” and offered additional protection, which includes racial or ethnic origins, genetic or biometric data, physical or mental health or condition, political opinion, membership of a professional association, religious beliefs or other opinion of a similar nature, the commission or alleged commission of an offence.&nbsp;&nbsp;Data Processing&nbsp;The Proclamation provides a broad definition of data processing, encompassing any action that is done to, or with, personal data, including simply collecting, storing, organizing, altering, and deleting personal data. As a result, the Proclamation is likely to apply wherever an organization does anything that involves or affects personal data.&nbsp; Personal data is required to be processed lawfully, fairly and in a transparent manner. Businesses that process personal data are required to obtain the clear consent of the data subject and provide clarity on the usage of the data. Moreover, personal data must be collected for specific purposes, and it shall be obtained only for one or more explicitly specified and lawful purposes. Businesses must, therefore, clearly define the purpose for which the data is collected, and the collected data must also be used for the purpose initially specified and cannot be used for unrelated purposes.&nbsp;&nbsp;Key principles under the Proclamation include:&nbsp;<ul><li style="text-align:justify;">Data sovereignty:&nbsp; Data controllers or data processors are required to store personal data collected or obtained in Ethiopia on a server or data center located in Ethiopia.</li><li style="text-align:justify;">Cross-border transfer of data:&nbsp; A data controller must demonstrate to the Ethiopian Communication Authority (ECA) that the third-party jurisdiction offers an adequate level of data protection. Additionally, the data subject must provide explicit consent to the transfer after being fully informed of any potential risks. The transfer must either be necessary or come from a public register that is intended by law to provide information to the public. Moreover, a cross-border transfer of sensitive personal data must obtain the prior approval of ECA.</li><li style="text-align:justify;">Right of Erasure:&nbsp; an individual has the right to demand his personal data be erased promptly free of charge if the following circumstances exist:</li></ul><ol><li style="text-align:justify;">The data is no longer necessary for the purpose for which it was collected or processed</li><li style="text-align:justify;">The data subject withdraws his consent on which the processing is based or objects to the processing, and there are no overriding legitimate grounds for the process</li><li style="text-align:justify;">There is no legal ground for the processing</li><li style="text-align:justify;">The personal data has been processed unlawfully</li></ol><ul><li style="text-align:justify;">Right to Obtain Information &amp; Copy:&nbsp; The data subject, upon request, has the right to obtain confirmation free of charge whether his personal data is being processed, along with access to the data processed, information on the data origin, and the duration for which it will be stored. This information is required to be provided to the data subject in an electronic or hard copy format.</li></ul>Data Processor Obligations&nbsp;A person who processes personal data has the following key obligations:&nbsp;&nbsp;<ol><li style="text-align:justify;">Registration: Businesses that intend to process personal data are required to be registered by ECA. ECA will issue a certificate of registration that will be valid for two years subject to renewal. ECA will determine the detailed registration requirements through a directive.</li><li style="text-align:justify;">Appointment of Data Protection Officer:&nbsp;If the core activity of an entity consists of processing operations which, by virtue of their nature, scope or purposes, require regular and systematic monitoring of data subjects on a large scale, or processing on a large scale of sensitive person data, or the processing is carried out by the government body (except for courts acting in their judicial capacity) has to appoint a data protection officer. The Proclamation allows a single data protection officer to be appointed by a group of entities or several public bodies provided that such an officer is easily accessible by each entity.</li><li style="text-align:justify;">Keeping a Record of all Processing Operations:&nbsp;Businesses must maintain, including logging, a record of all processing operations under their responsibility.</li><li style="text-align:justify;">Internal Data Protection Policy and Procedure: An entity shall put in place a data protection policy and implement the appropriate technical and organizational measures to ensure that the processing of personal data is performed per the law. Moreover, an entity is required to perform a data protection impact assessment.</li><li style="text-align:justify;">Notification of Personal Data Breach:&nbsp; When a personal data breach occurs, an entity is required to notify ECA and the data subject within 72 hours after having become aware of it. The notification to ECA is required to be accompanied with details including the nature of the personal data breach and the likely consequences of the personal data breach. The Proclamation provides that if the details cannot be provided within the time limit, the entity must notify ECA and provide the details in phases.</li><li style="text-align:justify;">Duty to Destroy Personal Data:&nbsp; Where the purpose for storing personal data has lapsed, an entity shall destroy the personal data as soon as is reasonably practicable in a manner that prevents its reconstruction in an intelligible form.</li></ol>Consequences of Breach&nbsp;The Proclamation empowers ECA to impose administrative fines. If personal data is processed in violation of the Proclamation, particularly by an institution handling sensitive data or the personal data of a minor, ECA can impose an administrative fine of up to 4% of the institution’s total worldwide turnover from the previous year.&nbsp;&nbsp;&nbsp;&nbsp;

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