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SOURCE: Translated in part by F_S_of W&C

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MOZAMBIQUE: LEGISLATION

ELECTRICITY LAW

LAW No. 21/97, of 1 October 1997

The economic development of the country depends upon the existence and availability of electrical energy, the generation and distribution of which requires substantial investments.

The State, its agencies as well as the other public law entities play a determinant role while recognizing the important role of the private sector in the development of the national electricity grid.

It is necessary to provide the Mozambican legal order with a basic regulatory instrument for the generation, transmission, distribution and sale of electrical energy, pursuant to the provisions of article 135.1 of the Constitution of the Republic, the Assembly of the Republic determines:

CHAPTER 1
GENERAL PROVISIONS

Article 1
Definitions

For the purposes of this Law, the following terms and expressions shall mean:

1                         Sale of Electrical Energy:  the sale of electrical energy to a consumer for the consumer’s own use or for purposes of resale to third parties.

2                         Concession:  The authorisation given to public or private entities by the competent authority under the terms of this Law and its Regulations for the generation, transmission, distribution and sale, including the importation and exportation, of electrical energy, as well as the construction, operation and management of electrical installations.  The authorisation may cover one or more of the aforementioned activities.

3                         Concessionaire:  The holder of a concession granted under the terms of this Law.

4                         Consumer:  a person or entity to whom electrical energy is supplied for domestic, industrial or commercial uses.

5                         Concession Contract:  an administrative contract which defines the terms and conditions to be applied to the realisation of one or more of the activities involved in the supply of electrical energy.

6                         Distribution of Electrical Energy:  the transition of electrical energy with a rated capacity of less than 66 kV from step-down transformer substations, transformers and or isolator stations to the installations which receive and transmit the electrical current to consumers.

7                         Force Majeure:  means any event which is not foreseeable, is outside the control of and was not caused by the party affected by such event, and which is the cause of the injury, damage or non-compliance, including floods, storms, sea tremors, earthquakes, fire, acts of war, insurrection, public unrest, strikes or other labour unrest.

8                         8 Supply of electric energy: activity of supplying electric energy to the consumers encompassing all or some of the activities of production, transportation, distribution and commercialization, including the importation and exportation of electric energy.

9                         Electrical installation: equipment and infrastructures to be used in the supply of electric energy all the way to the electricity meter of the consumer.

10                     Establishment License: document issued by the competent entity certifying that the electric installation can be established within the stated period.

11                     Exploration License: document issued by the competent entity certifying that the electric installations had been inspected and found to be in order authorizing the operation of the electric installations.

12                     Production of electric energy: conversion of any form of energy, whichever its origin into electric energy.

13                     National electricity grid: set of public service installations to be used for the production, transportation and distribution from electric energy.

14                     National electric energy transportation grid: set of systems used to transport electric energy between regions, inside of the country or to other countries to supply subsidiary grids and includes the systems that link grids to each other, central supply areas to each other or grids and central supply areas to each other. It is the same as a national transportation grid

15                     Just and reasonable tariffs: the tariffs regarding the use, consumption and transmission of electric energy are just and reasonable when they are set according to the following criteria (collective):

a)             that they assure the minimum possible cost for the consumers and that they are compatible with the quality of the given service;

b)             that they amortize (alternative: re-pay) the operation and capital costs over time; and

c)             that they provide a compatible return on the invested capital in the respective installation.

16                     Transportation of electric energy: transmission of electric energy with a voltage equal to or above 66 KV, from the transformer depository (alternative: vaults ) and the step-up substation connected to the power plants on to the distribution step-down substations.

Article 2 (Scope)

1                         The current Law applies to the production, transportation, distribution and commercialisation of the electric energy in the territory of the Republic of Mozambique, as well as its importation and exportation from or to  the national territory.

2                         The use and benefit of energy sources for purposes other than the generation of electrical energy shall be the subject of other, specific legislation.

Article 3
Purposes

The purpose of this Law is to define, in respect of electrical energy:

a)             the general policy for the organisation of the sector and the administration of the supply of electrical energy;

b)             the general legal framework in respect of the activities of electrical energy generation, transmission, distribution and sale within the territory of the Republic of Mozambique, as well as its exportation to and importation from outside of the national territory, as well as the grant of concessions for such activities;

Article 4
Role of the State

1                         The State, its agencies, as well as the other public law entities have a determinant role in promoting the development of the existing potentialities in such a way as to permit an ever increasing access to the benefits of electric energy and to contribute to the economic and social development of the nation and the region.

2                         The State shall ensure the participation of private initiative in the public service of electric energy supply through concessions that guarantee the right of the use and benefit of the energy resources while protecting the superior interests of the State.

Article 5
Organisation and Administration Policy

1                         The general policy for sector organisation and for management of the supply of electrical energy has the following objectives:

(a)                      to make beneficial use of existing and potential resources and to contribute to the process of economic and social development of the nation and of the region;

(b)                      to promote the extension of the national electric grid throughout the national territory in order to permit persons and entities not connected to the national electrical energy grid access to the benefits and facilities of electrical energy;

(c)                      to ensure the efficiency and quality of the electrical energy supply to consumers on terms which are fair and competitive;

(d)                      to develop the national energy capacity and the electric energy grid in order to stimulate economic and social development and to assure the supply of electric energy according to the needs of the consumers, whilst guaranteeing ecological balance, conservation and the preservation of the environment;

(e)                        to seek alternative technologies linked to the supply of electric energy;

(f)                          to supply electric energy as a public service;

(g)                        to guarantee the participation of the public sector in the execution of the public sector service of supplying electric energy;

(h)                        to create a favourable environment for the participation of the public sector in the execution of the public service of supplying electric energy.

ARTICLE 6 (Powers (alternative: Competencies)

The Counsel of Ministers (alternative: Government) has the power to:

(a)                      approve new undertakings regarding the supply of electric energy with an installed capacity equal to or greater than 100 MVA;

(b)                      define the authority regarding the award (grants) to supply electric energy at different levels;

(c)                      carry out the various powers allocated to it by the current Law and other applicable legislation.

CHAPTER II

NATIONAL ELECTRICITY COUNCIL

ARTICLE 7

National Electricity Council

1                         The National Electricity Council, also  known as CNELEC, is created by the current Law, endowed with juristic personality and administrative and financial autonomy, with an advisory function of defending the interest of the public. It also serves as a forum to listen to public opinion (alternative: gather public opinion) on relevant subjects regarding the national affairs of electric energy and the application of the dispositions of the present Law and its regulations.

2                         CNELEC has functions to conciliate, mediate and arbitrate different matters relating to questions that arise between different concessionaires or the concessionaires and its consumers in the following areas:

(a)           the right to the supply of electric energy including the refusal to or the interruption of supply;

(b)           the quality and regularity of the service of supplying electric energy;

(c)           the conditions and tariffs of sale of electric energy and transmission taxes;

(d)           the installation and the functioning of measuring equipment and counting meters (electricity meters)

(e)           appropriateness of the concessionaire’s equipment;

(f)             the refusal or delay in the supply of electrical energy by a concessionaire;

(g)           access for the purpose of transmitting the national transmission grid including the transmission installations of a particular concessionaire;

(h)           any other matter in respect of which a consumer or a concessionaire requests the intervention of CNELEC as a mediator or arbitrator.

3                         CNELEC shall be made up of five to seven permanent members selected from among reputable persons with recognised experience and expertise in respect of tariffs, economics and other legal and technical aspects of electrical energy supply systems.

4                         The members of CNELEC shall be chosen by the Government, by associations representing the productive sector, by the associations representing the general public/consumers, by scientific research institutions, by the manager of the national electric energy transmission grid and by the concessionaires.

5                         The president of CNELEC shall be nominated by the Government from among its representatives.

Article 8
Competencies of CNELEC

Without prejudice to the other powers and authorities attributed pursuant to this Law and other legislation, CNELEC shall have the competency to:

a)             pronounce upon electrical energy supply policies and objectives;

b)             issue advisory opinions on proposals for expropriation and declaration of public utility for new projects

c)             pronounce upon and propose regulations in respect of electrical energy supply and other matters relevant to the national electricity energy grid;

d)             issue advisory opinions on proposals for new projects and the applications for electrical energy supply concessions as well as the proposals for the setting and revision of tariffs and other terms for the sale or electrical energy by the concessionaire;

e)             draft proposals for the promotion and adoption of new technologies and the programs for the expansion of the geographical coverage of the national electrical grid as well as the realisation of nation-wide evaluations in respect of the execution of such programs;

f)               f) to participate in the supervision and evaluation of national and international public tenders for the allocation of concessions to supply electric energy;

g)             to carry out studies and inquiries that appear to be needed and appropriate to exercise its powers and duties presented to it

CHAPTER III

CONCESSION

Article 9

Requirements of a Concession

1                         The production, transportation, distribution and commercialisation, including the importation and exportation of electric energy, which also includes the construction, operation and management of electrical installations by individual or collection persons within the public sector, private sector and the societies flow from the previous allocation of a concession that may include one or more of the operations [alternative: activities] described in this document.

2                         The document containing the concession should note that:

(a)           the advantages to be obtained through the concession should be greater than the economic, social and environmental inconveniences that will result;

(b)           the payment of the costs and the risks associated with the concession and that will be suffered by third parties or the environment should be insured;

(c)           the tariffs and the supply condition to be applied should be just and reasonable;

(d)           the supply of electric energy should be incorporated into the national electricity grid

(e)           or the regional one that is in existence and has been planned;

(f)             the duration of the concession should be fixed;

(g)           in relation to new constructions for the supply of electric energy, the following should be taken into account, amongst other things: the equilibrium between the demand and supply and the growth in future demand, alternative means of supply, ability to meet demand and the balance between the costs and benefits to save the consumption of energy in its installations and the installations of the consumers;

(h)           the suitability, technical capacity and financial capacity of the candidate should be proved to the concessionaire.

3                         The execution of technical studies and other investigations connected directly or indirectly with the project to supply electric energy flow from a previous authorisation.

Article 10
Exemption from Concession

1                         The generation of electrical energy for personal use and consumption and not for supply to third parties is exempt from the requirement of a concession.

2                         Without prejudice to the provisions of the preceding clause, the construction and operation of an electrical installation requires the acquisition of an establishment licence and an operating licence as determined by regulations.

Article 11
Application for a Concession

1                         The application for a concession for electrical energy generation, transmission, distribution and sale, as well as the application for importation or exportation, shall be addressed to the competent authority and shall contain the identity of the applicant as well as an exposition of the purposes of the application and the length of the concession.

2                         The competent authority shall authorise or reject the application within a period of one hundred and eighty days from the date of submission.

3                         The requirements for a concession application shall be fixed by regulation.

4                         Concessions and the renewal of a concession shall be granted by means of a public bidding procedure in accordance with terms to be regulated.

5                         The applications for concession as well as for the renewal of a concession shall be subject to publication and to public hearings in accordance with regulations to be issued.

Article 12
Duration and Contents of a Concession

1                         The concessions shall be attributed in the form of an administrative contract for the period fixed in the contract.  This period shall have a maximum initial duration of fifty years and may thereafter be renewed.

2                         The renewal of the concession shall be approved subject to the compliance with the following requirements:

a)            The concessionaire has complied with the obligations imposed under the terms of the concession contract;

b)            The concessionaire has submitted a plan of operations and technical and economic studies that guarantee the best operational conditions.

1                         The duration of the period of renewal shall be consistent with the periods of amortisation of the addition investments and with the need to make the resources being used available for other uses that guarantee a greater economic and social benefit.

Article 13

Transfer of the concession

1                         The partial or complete transfer of the rights provided by the concession, is subject to a pre-approval from the competent entity taking into account the provisions of article 10 of the current Law, with the necessary adaptations.

2                         This article is applicable to transfers as stated in article 24(3) of the current Law.

Article 14

Management of the National Electric Energy Transportation Grid

1                         The management of the national electric energy transportation grid is allocated to a public entity which, due to its technical capacity, guarantees the operation, the reliability and the expansion of the public service of supplying electric energy.

2                         The assignment of the entity mentioned in the previous number and the applicable terms and conditions are established by a decree of the Cabinet.

3                         Private capital be used in the development of the national electric energy transportation grid in the terms prescribed for it.

CHAPTER IV

OBLIGATIONS, RESPONSIBILITIES AND RIGHTS OF THE CONCESSIONAIRE

Article 15

Assets made available by the concessionaire

1                         The concessionaire compels itself to provide movable and immovable assets to the activity that, although they will not constitute an integral part of the concession, are, however, proper and necessary for the asset management and exploration of the granted service, even if these are not, directly, a part of the supply of electric energy, these being:  vehicles automobiles, materials, utensils, stocks of raw materials, consumable and measuring devices and electricity meters.

Article 16

Specific obligations of the concessionaire

1                         The concessionaire compels itself, especially, among others duties:

(a)           (I) to explore the concession in accordance with the standards of a cautious and reasonable operator, looking to carry out its obligations with good faith and a level of skill, diligence, prudence and foresight  that would be to expected from an experienced and skilful operator with sufficient financial resources and in compliance with the laws, regulations, contract of concession and effective code regarding the grid.

(b)           (II) any reference to the standard of reasonableness of a cautious operator is to be considered a reference to the skill levels, diligence, prudence and foresight as   described here;

(c)           reference to such degree of skill, diligence prudence and foresight as described herein.

(d)           provide for the proper maintenance of all the goods dedicated to the concession until the termination of the concession;

(e)           payment of the indemnification due upon expropriation and upon thirty days prior notice, inform the holder of the respective rights and assets of the commencement of the operations for removal of underbrush, clearing, pruning, tree and bushcutting and earth removal;

(f)             abstain generally from the restriction or limitation of property rights;

(g)           restore the water used in the supply of electrical energy to the level of purity, original temperature and healthfulness in conformity with the data recorded at the time of the capture of the same water;

(h)           restore to normal the passageways and circuits which have been interrupted, reduced or detoured in order to carry out construction, maintenance, improvement and repair works in respect of electrical installations;

(i)             comply with the relevant parts of the legislation on water and fishing, including the regulations;

(j)             comply with legislation in respect of environmental matters;

(k)           give access to the ministry as well as persons or entities duly authorized by the ministry having oversight of the sector for the purpose of inspection of the installation, equipment, books and accounts and other documentation related to the activity in respect of which the concession was granted;

(l)             supply the data and information requested by the ministry having oversight of the sector and considered relevant for the oversight of the concessionaire’s activities pursuant to the concession.

2.            The concessionaire undertakes to carry out the service of supplying electrical energy in such a way as to best serve the interests and needs of consumers and to contribute to the nation’s economic and social development.

3.            The obligations defined in the preceding clauses as well as the other specific obligations, which apply to the concessionaire, shall be the subject of regulation.

Article 17
Duty to Supply Electrical Energy

1                         The concessionaire shall, in accordance with the terms established in the concession, supply electrical energy within the respective area of the concession to all consumer applicants who are able to guarantee payment for their consumption and for the cost of the installations, branch lines and other connections as well as the works for the necessary reinforcement and extension works.

2                         In the event of the unjustified refusal of, reduction or delay in the supply of electrical energy to an applicant or consumer, the applicant or consumer may bring a complaint with CNELEC or other competent authority which shall decide whether or not and on what terms the concessionaire shall supply the electrical energy.

3                         Electrical energy consumers within a concession area may obtain the supply of electrical energy from any concessionaire.

4                         The concessionaire shall co-operate in the co-ordination with other suppliers of electrical energy with regard to national and regional plans for the supply of electrical energy.

Article 18
Regularity of Supply

1                         The concessionaire shall ensure that the service provided for the supply of electrical energy is regular and of good quality and is carried out in such manner as to avoid prejudice and damages to economic activities and the electrical appliances and equipment of consumers.

2                         The service provided may be suspended or interrupted momentarily or partially in order that the concessionaire may ensure the maintenance or repair of the installations and equipment and undertake works of improvement.

3                         The concessionaire undertakes to reduce to the minimum possible, the frequency and duration of the interruptions and to limit them to the periods and times at which the interruption is likely to cause the least possible inconvenience to the consumer.

4                         The concessionaire shall notify the consumers of the dates and times of these interruptions by prior public notice.

5                         Provided that unforeseen circumstance beyond the control of the concessionaire demand urgent action, exceptionally, the concessionaire may immediately undertake the measures necessary to maintain and repair the equipment and installations, including the suspension of the services provided.

Article 19
Reduction or Termination of Supply

The concessionaire may not reduce or terminate the supply of electrical energy except in the following cases:

(a)           subject to the terms and procedures of the applicable Law, the consumer is declared insolvent or bankrupt;

(b)           the consumer does not timely pay the agreed charges;

(c)           the consumer does not fulfill the established conditions, having been informed by the concessionaire in writing, of the consequences of a failure to not fulfil these conditions within a period of thirty days after acknowledgment of receipt of the same;

(d)           or Force Majeure reasons, in the terms defined in this Law.

Article 20

Transmission of electric energy

1                         The concessionaire for the transportation of public electric energy cannot refuse another concessionaire or consumer, having the technical availability, from transmitting electric energy in its electric installation.

2                         The concessionaire for the transportation of public electric energy grants the service of transportation of electric energy to another concessionaire or consumer in comparable conditions, without discrimination, in a quality and price, similar to those directly given to it.

3                         The transmission of electric energy through the installations of a third party is made by means of the payment of a transmission tariff. The transmission tariff is fixed with reference to the cost of exploration of the related installation taking into account the load on the grid, the length of the tracing (possibly: the distance over which it is carried), as well as other prescribed costs.

4                         Any of the involved parties can ask for, in compliance with article 22(4), a revision of the tariff to be done by the competent entity.

5                         By means of the approval of the competent entity, the transmission of electric energy, the respective conditions and tariffs, in one determined region, can be agreed upon  between the respective concessionaires or consumers operating in a region.

6                         The authorization of a concession for transportation and/or distribution of electric energy can be conditional on the increase of the capacity of the proposed installation which will make the transmission of electric energy to other consumers and/or concessionaires possible.

Article 21

Access to the installations granted by the concessionaire

1                         The concessionaire, or the people or entities whom it has expressly authorized , have the right of access to the places that receive or have received electric energy that is supplied by the concessionaire, whose the objective is to proceed with the manoeuvres (alternative: drilling or work) or to inspect the workmanship, lines, measuring devices and other technical equipment of the concessionaire, to carry out the measuring of energy that is granted or to effect the removal of the equipment that belongs to it when it verifies that it no longer supplies electric energy.

2                         The right of access referred to in the preceding clause shall be exercised during normal business hours except where special circumstances concerning the consumer or the concessionaire justify that access occurs at a different time.

3                         The concessionaire is obligated to repair any damages caused by virtue of the exercise of the rights referred to in clause 1.

Article 22
Application of Rates by the Concessionaire

1                         The electrical energy use, consumption and transit tariffs shall be fixed in the concession in question.

2                         The tariffs for electrical energy use, consumption and, subject to the provisions of clauses 2 and 3 of article 20, transit shall be fair and reasonable.

3                         The concessionaire may not charge consumers any other charges or tariffs that have not been stipulated in the concession.

4                         The approved tariffs may be revised at the request of the concessionaire who shall provide all the information necessary for this purpose.  The revision of tariffs shall comply, with the necessary adaptations, with the procedures for the attribution of a concession.

Article 23
Termination of a Concession

1                         A concession shall terminate:

(a)          on the date of expiry of the concession with the term having been extended;

(b)          by revocation, in accordance with the provisions of the following numbers;

(c)          by rescission by the concessionaire in accordance with the provisions of number 5 of this article 23.

2                         Upon prior notice and in accordance with the procedures to be established by regulations, the entity which issued a concession may revoke the concession upon the occurrence of any one of the following events:

              a)       deviation from the purpose of the concession;

              b)       suspension of the activity which is the subject of the concession which suspension does not result from a force majeure event;

              c)       repeated refusal to permit the due exercise of inspection and supervision;

              d)       refusal to undertake the appropriate maintenance and repair of the electrical installation and assets dedicated thereto;

              e)       the intentional charging of tariffs at a rate in excess of that which has been fixed in the concession;

              f)        the bankruptcy of the concessionaire;

              g)       the unauthorized assignment or other transfer of the concession;

              h)       the material violation of the terms of the concession contract or the dispositions of this Law and its regulations.

1                         The entity which issued the concession shall not revoke the concession in the event that the concessionaire complies fully with its obligations and corrects or cures the cause of the aforesaid notice within the period fixed in the notice for this purpose.

2                         The concession may provide for notice to be given to the principal creditors of the concessionaire to permit that such creditors may, in the period provided for this purpose, propose a solution which might preclude the revocation.

3                         The concessionaire may rescind the concession contract on twelve months prior notice and based upon the material violation of the State’s obligations, provided that such violations have resulted in the disturbance and/or damage which compromises the proper exercise of the concession activities and the fulfilment of the respective obligations related to the regular supply of electrical energy.

4                         Upon the termination of a concession pursuant to the preceding clauses, the competent authority may, in accordance with criteria and procedures which are applicable to the grant of a concession, determine:

              a)       the reversion, subject to the provisions of article 24, of the installations and equipment in favour of either the State or a third party having the appropriate capability to undertake directly the operation of such installations and equipment;

              b)       the removal or destruction of the electrical installations and/or the assets dedicated thereto.

1                         Without prejudice to the provisions of the preceding clauses, during the twelve months preceding the expiry of the concession, the competent entity shall take all measures which are useful and necessary to ensure the continuity of the public service for the supply of electrical energy and its transfer to a new regime of operation.

2                         The entity which, pursuant to the terms of this article, comes to operate the system, shall inventory the existing assets and shall assume the responsibility for same.

Article 24
Indemnification

1                         Once the concession comes to an end and it is verified that the installation and affected assets have been reverted, the concessionaire is indemnified, in accordance with article 25, to value of the audited accounting amount of the investment, free from any onus or incumbency and without prejudice of the right of recourse of the State towards the concessionaire, for the prejudice and damages cause by the obligations that it assumed which were contracted in contradiction with the law or the contract of the concession.

2                         In the calculation of the indemnity, one considers the verified depreciation of the assets until the date of the transfer, its state of conservation and effective functioning, noting any deterioration due the lack of maintenance or repair as well as its adequacy for the objectives of the installation. These are, however, not taken into account for the purposes of calculating the indemnity amount, or for the fact of it dealing with an administrative reversal, or the potential advantages or losses of profits of the installation.

3                         In the case of a transfer of the installations to a third party, the person or entity to who the installations is granted and respective concession becomes responsible for the indemnity in terms of the previous numbers, to the initial concessionaire for the value of its capital assets.

4                         If the costs of the assets have already been partially or totally amortized by the funds received for the tariffs, such fact becomes a consideration to assure that the such consumers are only responsible for the amortizations (repayments), in terms of tariffs to be applied, for the parts still not amortized.

5                         The value of the indemnity will be approved by the same competent authority that authorised the respective concession in the terms of article 11 of this Law.

6                         Decisions taken in relation to the indemnity may be challenged through competent judicial or administrative bodies.

Article 25

Reversion of assets and rights

In the case of a concession that involves electric installations whose construction was carried with public fund or it did not result from the concessionaire’s funds, the concession contract may state that, on the date fixed for the term of the concession and there being no extension of the concession period, all the affected assets of the concession revert, gratuitously and without any incumbencies, to the State or an entity that it indicates, being an entity which is operating in the same terms and has subrogated all of the rights of the concessionaire (substituted the concessionaire and took over its rights).

Article 26

Responsibility of the concessionaire

1                         The concessionaire is the only one responsible for the functioning of the service objective of the concession, which it manages and explores for its exclusive account and risk.

2                         All the responsibility derived from the functioning and/or exploration of the granted service falls exclusively on the concessionaire.

The responsibility referred to in clause 1 of this article simultaneously covers;

(a)                Criminal liability incurred for non-compliance with the Laws and regulations             in force;

(b)                Civil liability for the injury and damages caused in accordance with the laws in        force.

3                         This civil and criminal liability is subject to:

(a)                Events of force majeure;

(b)                            The fault or negligence of the injured party, where duly proved;

(c)                Cases where the accident is attributable to third parties;

(d)                Injury, damages or disasters which result from the nature of the installation.

4                         When injury and damages result from different but inter-dependent installations, the concessionaires of each installation are jointly liable.  The respective indemnification shall be divided among the several concessionaires, unless it is demonstrated that some are liable and others are not.  In this case the indemnifications shall be fairly and equitably divided among the persons liable therefore.

5                         The concessionaire of an electrical installation is liable for any damages that result from the acts of the concessionaire’s employees.

CHAPTER V
FEES AND FISCAL REGIME

Article 27
Concession Fee

1                         The Concessionaire shall pay annually a concession fee assessed on the gross revenue of the concession derived from the supply of electrical energy.

2                         The rate as well as the terms and conditions shall be established by the Council of Ministers.

Article 28
Fiscal Regime

The concessionaires shall be subject to the general fiscal regime established in the legislation currently in force.  The Council of Ministers may establish a fiscal regime applicable to the activity of the supply of electrical energy, with forms and rates of taxation appropriate to this activity, as well as incentives for investment realized in this area.

CHAPTER VI
LAND USE AND EXPROPRIATION

Article 29
Right to Land Use and Protection Zones

The concession for the supply of electrical energy implies the authorisation to have access and to use, in accordance with the approved terms, the land necessary for the realisation of the works and the appropriate operation of the concession, subject to the payment of the fees and indemnification

Article 29

Right to land use and protection zone

1                         The concession for supply of electric energy implies the authorisation to have access and to use, in accordance with the approved terms, the land necessary for the realisation the works and appropriate operation (adequate exploration) of the concession, subject to the payment of the fees and indemnity that are owing and subject to the fulfilment of the procedures required in the terms of the Land Law, its Regulation and other legislation applicable to the attribution of the use right and enjoyment of the land, as well as the expropriations in the terms of the articles that follow.

2                         The concessionaire holds itself as responsible, in the terms of the applicable law, for relatively getting the constitution (composition) and landmark of the respective servitude or protection zone relating to the electric installations.

3                         Without prejudice to the provisions of the previous numbers, the concessionaire can request the destruction of plantations and constructions that can damage the lines of energy or its exploration.

Article 30

Expropriations

1                         When for reasons of necessity, utility or public interest, the production, transportation or distribution of electric energy it implies (requires) the use, occupation, damage or destruction of immoveable properties and related rights, or a limitation of rights and the imposition of an incumbency on existing rights related to these properties, the grant of the concession is conditioned on the prior expropriation and the liquidation of the (just) indemnity, in order to carry out the (applicable) legal terms.

2                         The expropriation foreseen in the previous number is conditional on the satisfaction of the following requirements, that:

(a)                the concessionaire or petitioner for a concession already has taken legal caution in the acquisition of the right of use and enjoyment (alternative: exploitation) of the land or other real properties, by means of agreement with the holder of the right or proprietor of the asset;

(b)                 the acquisition of the immoveable property or the right related to immoveable property appears to be for public use and necessary for the realisation of the project to supply electric energy;

(c)                 the right or expropriated immoveable property is not used for a different purpose other than the one that determined the expropriation;

(d)                 if a declaration of public utility (use) is issued in terms of this article.

3                         In the event of immoveable property or a right relating to it not being used for the purpose for which it was expropriated, the same will revert to its original owner or user, without an obligation for the reimbursement of any indemnity that was paid.

4                         Cabinet has the power to emit, from the expropriation proposals, a declaration of public utility relating to the projects of construction of electric installations carried by private persons (entities) in accordance with this article and other procedures of the law that is applicable to such a situation.

CHAPTER VII
SAFETY AND ENVIRONMENTAL PROTECTION

Article 31
Safety and Protection of Assets and the Environment

1                         The supply of electrical energy shall obey the safety rules in force as well as the norms of good electricity industry practice.  The electrical installations shall be established in such way as to eliminate all foreseeable dangers to persons and avoid damage to material goods, to avoid the disturbance of free and normal circulation in public or private rights of way, nor affect their security, nor to prejudice other energy or telecommunication lines or to cause damages to water and other pipelines.

2                         In the establishment of an electrical installation, the most convenient location shall be chosen subject to consideration of environmental and scenic landscape concerns and the ecological systems traversed.

3                         The historical and cultural patrimony of the nation, as well as other places which have a scientific, ecological, scenic or architectural value shall, whenever located within areas chosen for the establishment of an electrical installation, be respected and shall warrant special protective measures to avoid any damage thereto.  The measures which are necessary in order to reduce the cutting of stands of trees to the absolute minimum shall also be taken.

Article 32
Safety Measures

1                         The realisation of any operations which could put at risk the safety of the persons carrying out the tasks due to the proximity of electrical installations, or place in danger or cause disturbances to these same installations shall only be initiated after the interested parties take the mutually agreed, necessary precautions.

2                         Regulations shall be promulgated setting forth the safety and protective measures to be adopted to prevent damages to electrical installations, including those which are important to the national electrical grid.

CHAPTER VIII
WORKS AND OPERATIONS

Article 33
Realisation of Works and Operations

1                         The concessionaire, or the persons contracted for construction works or services, may realise works and operations within the scope of the concession attributed for electrical energy generation, transmission and distribution, subject to compliance with the applicable legal and regulatory dispositions.

2                         The works, workmanship and manoeuvres (alternative: The works and related activities) may involve the temporary alteration of the configurations of places of public use, as well as communication channels or pavements, in order to substitute aerial cables or underground cables, installation or removal of posts, cabins, electricity boxes or others.

3                         During and until the end of the execution of the works, workmanship and manoeuvres (works and related activities), the concessionaire remains obliged:

a)      to, in so far as possible, respect the original tracing (course) and the materials previously used;

 b)     to proceed with putting in place adequate signs and bans (prevention) in affected places.

 c)     to effect the removal of any rubbish created by the works;

 d)     to repair and to restore the places affected by the works and related activities.

 

CHAPTER IX - USE OF HYDRAULIC VOLUMES (USE OF VOLUMES OF WATER)

Article 34

Access to volumes of water

1                         Without prejudice to the provisions of competent legislation, in terms of article 9(2) of the current Law, the concessionaire is guaranteed access, for the purpose of electricity production:

(a)                to use a defined amount of water;

(b)                to remove, to block or to store a defined amount of water of a hydraulic course, from within or outside of the water bed.

2                         Exemption from payment of any, taxes on the water use is granted, in terms of article 43(2) of Law nr 16/91, of 3 of August, to the concessionaires who will be authorized the access to the water volumes taking in account the effect of the production of hydroelectricity in the terms of this Law.

3                         To the concessionaires mentioned in the previous number, are allowed to get, in the terms of the Land Law and the respective regulation, the right to the use and enjoy (alternative: exploit) the necessary areas in order to accomplish the works and the installation of necessary services linked to the water use.

CHAPTER X - CRIMES, INFRACTIONS AND SANCTIONS

Article 35

Robbery(Theft)

1                         Punishment for theft will be served, on those that:

a)      fraudulently obtain electric energy or fraudulently deviate electric circuits;

b)      use any fraudulent means that influences the functioning of the electricity meters or that allows the use energy without it being duly accounted for.

2                         Equally punishment for theft will be served, on:

(a)                possessors or holders of copper wire, aluminum or of another material, as well as components of any electric installation including, without limitations, devices, equipment, parts and accessories used in the supply of electric energy, that is not able to prove its origin.Wire made of other materials or any other part of any electrical installation, as well as any component of any part of an electrical installation including, without limitation, appliances, equipment, spare parts and other accessories which are used in the supply of electrical energy who is unable to prove the legal provenance of same.

(b)                he possessor of products or articles, which contain copper, aluminium, galvanised steel and other metals, accessories and materials used in the supply of electrical energy, who is unable to prove the legal provenance of same.

3                         Persons, who, purchase, pawn or receive as a gift or in any other form acquire, receive or conceal for their own benefit or the benefit of a third party anything that the person knows to be the product of a crime shall be considered to be accessories to the crime of theft as provided for under paragraph a) of clause 35.2.  Persons, who assist the thief, make use of the product or influence other parties to acquire, receive or conceal in good faith shall also be considered to be accessories to the crime of theft as provided for under paragraph a) of clause 35.2.

4                         Accessories and accomplices of a crime shall be subject to the same punishment as that provided for the authors of a crime.

5                         In the cases provided for under clauses 2 and 3 of this article, the prison sentences may not be suspended nor substituted by a fine.

Article 36
Damages

Any person who in any way interferes, or voluntarily disarranges any electrical installation or any part of an electrical installation in such a way so that the public utility production is impeded shall be considered to be a perpetrator of the crime of damage and as such, be punished in accordance with the provisions of the Penal Code and other legislation in force, provided that the prison sentence may not be less than one year.

Article 37
Proof of Charges

In the charges for crimes referred to in this chapter and filed by the agents of authority or by the agents of a concessionaire who is a public law entity, the requirement of naming the witnesses shall be dispensed with.  These charges will be treated as prima facie proof in court during both the instruction of the charges and the trial until contradicted by proof regardless of the type of proceeding that is applicable to the crime charged.

Article 38
Aggravated Contempt

Any person who, being a user of lands adjacent to electrical energy transmission lines, causes, consents to or maintains in or on such lands plantings or constructions which prejudice or damage such lines or their operation and, having been duly notified, fails to destroy such plantings or constructions, shall, in accordance with the provisions of the Penal Code, be punished.

Article 39

Other infractions

1                         Without prejudice to the criminal procedure that may be in place of or restated articles 35, 36 and 38, they constitute punishable infractions in accordance with these terms that regulate it:

(a)                 the exercise of the activity of supplying electric energy without the necessary concession;

(b)                the establishment and/or operation of an electric installation without the respective license;

(c)                 the non-fulfilment of the respective obligations imposed to the license holders and/or concession;

(d)                the non-observation (non-recognition) of the present Law and its various regulations.

2                         The consumers may not prevent the concessionaires from exercising, whether by intermediary by its staff that is duly identified and credential, their duties in fulfilment of this Law and its regulations. The supply of energy to anyone causing such an prevention may be interrupted.

Article 40

Procedure in fraud cases

1                         When the concessionaire of the supply of electric energy verifies or presumes the existence of fraud, it will ensure that the competent authorities participate in the proceeding regarding the inspection of the installation for evidence of fraud.

2                         If, as a consequence of the inspection, the concessionaire verifies that there is fraud in existence, it may suspend the supply of electric energy.

Article 41

Sanctions

 The sums of the fines that apply to the crimes foreseen in articles 35, 36 and 38 of present Law are the following ones:

(a)            3 500 000,00 500 TM or 40 000,00MT, for the crime foreseen in 35(1)(a)dealing  with installations in lowers or and high tension on average, respectively;

(b)           500 000, 00MT or 11 500 000, 00MT for installed KVA, I appeal crime foreseen in 35(1)(a) dealing with installation in low or and high tension respectively, increased of the incumbencies of electric energy on the basis of the normal consumption of the consumer,

(c)           for the crime referred to in paragraph a) of article 35.2, 45 000 000 Meticals for each kilometer or fraction thereof of cable or wire unlawfully taken when low tension installations are involved and 168 000 000 Meticals for each kilometer or fraction thereof when medium to high tension installations are involved, and in relation to any other part(s) of an electrical installation, three times the cost of replacement or repair of same;

(d)           for the crime referred to in paragraph b) of article 35.2, an amount equal to four times the market price of the articles found in the possession of the perpetrator;

(e)           for the crime referred to in article 36, an amount equal to three times the cost of replacement or repair of the equipment or appliance;

(f)             for the crime referred to in article 36 and amount equal to the cost incurred by the concessionaire to remove or destroy the plantings or constructions.

2.            The applicable fine shall be doubled in the event of a repeat offence.  The determination of whether or not an offence is a repeat offence shall be determined in accordance with the Penal Law, then in force.

3.            The Council of Ministers whenever it is demonstrated to be necessary.

CHAPTER XI
FINAL & TRANSITIONAL PROVISIONS

Article 43
Celebration of Agreements with Third Parties

No provisions of this Law may be interpreted in such manner so as to constitute an impediment to the celebration of any agreement or contract between a concessionaire and a third party for the purpose of the realisation of works, equipment, installation, technical assistance, management, or the partial or total operation of the installations, provided that the concessionaire shall remain responsible as defined in the authorization.

Article 44
Acquired Rights

1                         The holders, at the date this Law enters into force, of concessions for electrical energy supply shall maintain the rights and obligations established in the respective concession contracts and in respect of the assets dedicated thereto.

2                         presentation by the bearer of  comparative documentation of the existence and validity of the same in the stated period of twelve months from the date that the present Law comes into force.

3                          The present Law safeguards the rights relating to the supply of electric energy acquired through previous legislation. This is, however, only is such right: has not been extinguished (has not expired),  abandonment for more than one year,  is subject to the terms and applicable conditions that are similar to the terms of this Law and its regulation.

4                         The recognition of acquired rights that are protected by previous legislation must be complained of within twelve months from the date the present Law enters into force, with the interested parties to presenting the necessary information and clarifications.

5                         Without prejudice to the provisions in the previous numbers, those people and entities currently carrying out activities of supplying electric energy without the benefit of a concession or operating a electric installation in terms of article 8, have 12 months from the date the present Law enters into force, to submit the respective requests for the attribution of a concession and/or licenses of establishment or exploration, as the case may be.

6                         The competent authority recognises, through the allocation of the concession in terms of article 7, or by the emission of the licenses in terms of article 10 of this Law, the rights acquired in the terms of the previous numbers.

Article 45

 (Reservation of internationally assumed obligations)

The provisions of present Law do not harm the concurrent obligations assumed under international commitments with other States or foreign entities, which are protected by agreements, conventions or contracts that regulate those.

Article 46

International Cooperation

The Republic of Moçambique participates in organizations and events of an international nature in the domain of electric energy and develops participation shares in investments of regional interest, with the vision of giving value to the national energy potential.

Article 47

Revocation of the previous legislation

 All previous legislation contrary to the present Law are revoked, safeguarding the provisions of article 44.

Article 48
Entry in Force

This Law enters into effect thirty days after its publication.