Parliament approves new Electricity Law

The Assembly of the Republic (the Mozambican parliament), on Thursday (01-08) approved, definitively and by consensus, the Electricity Law, a document that defines the general organisation and legal framework for electricity supply activities in the country. Speaking during the presentation of the justification for the proposed revision of the law, submitted to parliament by the government, Minister of Mineral Resources and Energy Carlos Zacarias explained that the change is based on number 04, of article 51, of the law, which deals with exceptional situations where different international rules are permitted.

review also aims to safeguard future projects that the country may develop in the energy sector and other similar projects, whose investors are from the electricity sector, some of whom are involved in previous projects.

“We have already developed projects under the old electricity law, but there are ongoing projects in the sector that must be assessed in light of international rules,” Zacarias noted.

The minister stated that creditors have been demanding changes, especially with regard to arbitration.

The amendment approved by parliament establishes that the parties may, by agreement, freely choose the forum for arbitration and the languages to be used in the arbitration process, provided that they are simultaneously translated into Portuguese.

Previously, the electricity law established that the arbitration forum would take place in Maputo, and always in Portuguese.

According to Zacarias, after approximately two years of implementation of the Electricity Law, now revised, the old provisions no longer proved viable for some international investment projects, given that “the forum is not considered impartial and the language is ineligible to conduct the arbitration process in the resolution of conflicts by international financial institutions”.

According to the minister, the creditors of the projects underway in the electricity sector demand that both the arbitration, as well as the language, and the choice of venue, be viable to facilitate international resolutions in the electricity field. “The creditors demand an impartial forum to resolve any disputes that may arise between the State and the concession holders,” he stressed. The 9th ordinary session of parliament ends next Thursday (08-08).