Energy commission license Applications in Ghana

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The Energy Commission is a parastatal, mandated by law to regulate and manage the development and utilization of energy resources in Ghana, specifically in electricity licensing, renewable energy, natural gas and energy efficiency.

APPLICATION FOR AND APPROVAL OF LICENCE

Eligibility for acquisition of a Licence

A license may only be granted to;
a) a citizen of Ghana; or
b) a body corporate registered under the Companies Code, 1963 (Act 179)or under any other law of Ghana; or
c) a partnership registered under the Incorporated Private Partnerships Act, 1962 (Act 152).
With respect to power generation licenses for supply of power to the regulated market (i.e., for sale to the public through distribution concessions), the following requirements must be fulfilled;
a) the project must have been selected through a competitive procurement process
b) the project must meet an anticipated demand as determined by the national electricity supply and demand projections.

Prohibition on cross-ownership

In order to prevent abuse of monopoly by Distribution and Transmission Utilities, the following prohibitions shall apply;
i. A holder of, or applicant for a Generation Licence, Broker Licence or Transmission Licence or Affiliate thereof or any stockholder, director or officer or any of their relatives within the fourth (4th) civil degree of consanguinity or affinity, legitimate or common law, and their respective spouses, shall not hold any shares of stock or own any equity interest, directly or indirectly, in a Distribution Utility.
ii. A holder of, or applicant for a Generation Licence, Broker Licence or Distribution Licence
or Affiliate thereof or any stockholder, director or officer or any of their relatives within
the fourth (4th) civil degree of consanguinity or affinity, legitimate or common law, and
their respective spouses, shall not hold any shares of stock or own any equity interest,
directly or indirectly, in the Electricity Transmission Utility (ETU).
Licence Application and Permit Manual for Service Providers in the Electricity Supply Industry

iii. Except for ex-officio government-appointed representatives, no person who is an officer or director of a Distribution Utility or the Electricity Transmission Utility shall be an officer or director of the licensee.
4.4 Notwithstanding 4.3 above, this prohibition shall not apply:
a. To a relative by blood or marriage, if such relative of any stockholder, director or officer of a Distribution Utility or the Electricity Transmission Utility has no employment, consultancy, fiduciary, contractual, commercial or other economic relationship or interest in a Distribution Utility or the Electricity Transmission Utility; or
b. Conversely, if such relative of any stockholder, director, or officer of the licensee has no employment, consultancy, fiduciary, contractual, commercial or other economic relationship or interest in the licensee.
c. Ownership of shares of stock in a company listed in the Ghana Stock Exchange (GSE) even if such listed company is the licensee and if such share ownership is not more than one per centum (1%) of the outstanding local shares of the listed licensee; or
d. Ownership of share of stock which is not more than one per centum (1%) in a company listed in the Ghana Stock Exchange (GSE) which owns or controls shares of stock in a Distribution Utility or the Electricity Transmission Utility.

Application Fees in Ghana

Applicants shall pay to the Commission the application fees stated in Schedule 2: Schedule of Licence Fees.

The application fees, as stated in the Schedule shall be approved annually by the Parliament of Ghana, and published on the Commission’s website (www.energycom.gov.gh).
The stipulated application fee will be payable in respect of each type of licence sought, regardless of whether or not applications are made separately or are aggregated into a single application document.
A licence application shall not be assessed unless the appropriate fee is paid by the applicant.
Fees paid on submission of an application shall cover the specific stage in the licensing process.

An amendment application filing fee shall be charged for a request to amend an approved licence, siting clearance, construction work permit or authorization to operate.
The amendment application filing fee shall be determined by the Commission based on the amount of work involved with the amended portion of the application.

Project Registration

A person seeking to apply for a licence shall first register the proposed project with the Energy Commission.

An application for registration shall be made with the forms approved and supplied by the Commission. Samples of the forms are provided in the Schedule Application Licence Application and Permit Manual for Service Providers in the Electricity Supply Industry

Form A and the application forms can also be accessed from the Commission’s website (www.energycom.gov.gh).
The Project Registration is valid for a period of two (2) years and can be renewed after expiration.

Project Registration will allow a prospective participant in the industry to:

a) participate in any competitive tender in the electricity supply industry;

b) obtain guidance from the staff of the Commission in progressing the project;

c) engage with potential off-takers for purchase or sale of power;

d) engage with financiers for funding of the project;

e) engage sponsors for support in the initial stage of the project; and

f) engage with the grid operator or a distribution utility.

Notwithstanding the above, the registration of a project does not:

a) guarantee the conclusion of a Power Purchase and Sale Agreement;

b) permit the commencement of site preparation works; and

c) allow commencement of construction of facilities.

Approval of the proposed project site

For projects that require the construction of facilities, the applicant shall secure a Siting Permit from the Energy Commission.

The Siting Permit ensures that the site selected for the construction undergoes due diligence for environmental, power evacuation and safety concerns.

The applicant will be required to make a presentation to the Siting Committee of the Commission. (see Appendix III- Membership of the Siting Committee), and the Commission shall review the application based on the recommendations of the Siting Committee.

Submission of licence application

On completion of the preliminary processes above, the applicant may begin processes towards
applying for a licence as specified in the respective chapter for each licence type.

Once all the required submissions are available, together with all other requirements of the financial institution from which funding is sought, the applicant may submit a formal application for a licence to the Office of the Executive Secretary of the Commission.

The applicant shall complete the appropriate forms in their entirety and submit all required attachments, affidavits, and evidence of capability specified.
An incomplete application will not be processed or may be rejected.
Separate applications are required from an applicant to engage in different market activities that fall within different segments of the industry. The Commission may accept a single application Licence Application and Permit Manual for Service Providers in the Electricity Supply Industry from an applicant in respect of multiple activities in the same segment of the industry, buy separate licences will be issued for each market activity or facility where the activity is carried out and the appropriate fees charged.
An applicant may be requested to furnish the Commission with further information as the Commission may deem necessary, and the applicant will be required to submit such information before the application will be deemed to be complete.

An application shall be deemed to have been successfully lodged only if and when all relevant supporting documentation required, as indicated in the respective chapter for each licence type (as well as any additional information requested), is provided to the Commission and full
payment of the required application fee has been made.

The Commission shall acknowledge receipt of an application for a licence within ten (10) working days of submission of an application and indicate whether the applicant’s submissions fully satisfy the requirements expected of the relevant type of licence or otherwise.

In the case of Electricity Generation Licences, all related Power Purchase Agreements should capture the obtaining of the required license as a Condition Precedent to the effectiveness of the
agreement.

The Energy Commission Licencing procedures are not subject to the
requirements or terms of any Power Purchase Agreement, and the refusal of the Commission to grant a licence applied for, cannot be used as grounds for lodging a claim against any public entity.
The applicant is required to sign a declaration indicating that all data presented to the Energy Commission in the application for licence are true and correct to the best of the Applicant’s knowledge.
The applicant may be required to make a presentation to the Board of the Commission as the final step in the application process.
For projects that require construction of facilities and for which financing must be sought from third parties (such as banks), a provisional licence will be issued in the first instance.

This licence will provisionally authorise the commencement of the construction of the facility, subject to achievement of financial close within 18 months of issuance of the licence.

The applicant shall pay a fee of 10% of the Initial Licence Fee as a performance guarantee against the achievement of financial close.
Where a licensee is unable to achieve financial close within the stipulated 18 months, the licensee may apply for an extension of time for a period not exceeding 6 months, providing evidence that the granting of the requested extension would, with a high degree of certainty,
lead to the achievement of financial close within the extension period requested.

The Commission will consider such application, and determine whether or not to grant the extension period requested on the basis of the evidence submitted.

Any application for extension must, however, be submitted at least two clear months before the expiry of the provisional licence.
Failure to notify the Commission of financial close (and make full payment of the initial licence fee) within 18 months of issuance of this provisional licence or failure to secure an extension of Licence Application and Permit Manual for Service Providers in the Electricity Supply Industry
the 18-month window before the expiry of the licence will lead to the licence being cancelled without an option for renewal, and the performance guarantee paid shall be forfeited.

On achieving financial close, the licensee shall apply to the Commission for the full licence, with evidence that financial close has been achieved. This licence will authorise the licensee to move to site and commence construction activities in accordance with the provisions of the
licence.

Consideration and approval of the application

The Commission shall within sixty (60) working days after acknowledging receipt of the last relevant submission from an applicant, provide an applicant with written notice of the Commission’s decision on the determination of the status of an application for a licence.
The Commission shall issue a licence if it is satisfied that:

(a) The applicant is suitable to hold the licence applied for;

(b) In the case of an electricity generation licence, the proposed generating plant meets an established power demand, has been procured through a competitive bidding process and meets the requirements specified by the Commission to supply electricity safely and efficiently;

(c) For a distribution licence – the proposed network has the necessary characteristics and integrity to distribute electricity to consumers efficiently;

(d) For an electricity sale licence – the applicant has the financial capability to operate a sales licence and can meet all other obligations specified by the Commission;

(e) For an electricity export licence the applicant can meet all domestic obligations;

(f) For an electricity import licence- the applicant shall be an Electricity Generator, Distribution Company, Bulk Customer or Brokerage licensed by the Energy Commission;
and
(g) For an electricity brokerage licence – the applicant has the financial capability to operate an electricity brokerage.
In deciding whether an applicant is suitable to hold a licence, the Commission will consider:

a) The applicant’s previous commercial and other dealings, within and outside Ghana, as may be deemed appropriate by the Commission (including that of its major officers, principals and shareholders) in order to determine or assess the applicant’s standard of credibility and integrity and to ascertain, among other things, possible past breaches of statutory and other legal obligations in previous dealings;

b) The financial and technical capability of the applicant and the human resources available for the operations under the licence; and
c) Other matters as prescribed by the Act or any other relevant laws and Regulations.

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