Electricity Production Activities

Authored by: Ahmad Sergieh

In brief:

• A number of projects in Dubai involve a joint venture with DEWA in relation to the production of electricity.

• When carrying out an electricity production activity in Dubai certain approvals are required.

• The Dubai Municipality will decide if environmental clearance is approved or rejected.

Background

To establish a joint venture project company (Project Company) in Dubai, a number of comprehensive steps need to be taken and various approvals need to be sought e.g.  Department of Economic Development (DED) trade name reservation and initial approval and receipt of the DED licence.

When setting up a Project Company in Dubai which is carrying out an Electricity Production Activity (EPA) additional approvals are required from the environmental section of the Dubai Municipality.

The Electricity Production Activity

If a Project Company intends to carry out an EPA, the approval of the environmental section of Dubai Municipality will be required.

Gaining approval for an Electricity Production Activity

In this article we will summarise the steps required to gain the relevant key approvals for an EPA.

1. Documentation

Upon having accessed the Dubai Municipality portal, the authorised representative of the Project Company must request “Environment Clearance for Industrial Projects” and submit a number of documents through the online system (EPA Documents) including but not limited to:

1. the trade name reservation certificate and an initial approval follow-up receipt approved by the DED;

2. the initial prescribed DED application form having been submitted to, and approved by the DED;

3. an Environment Impact Assessment report (“EIA Report”) in accordance with the Dubai Municipality Technical Guidelines as further set out below;

4. a letter issued by the Industrial Section of the Ministry of Economy (MoE)  to the Dubai Municipality confirming that the EPA does not require its approval and therefore does not need to be registered with the Industrial Section of the MoE;

5. a letter from DEWA confirming that it has no objection of having the company carrying out the EPA;

6. a certificate confirming the capital costs to be incurred in connection with the project; and

7. payment of applicable fees to Dubai Municipality.

2. EIA Report

A full and approved EIA Report is required from the Environment Department of the Dubai Municipality in order to obtain an Environmental Clearance or licence from the Environment Department of Dubai Municipality by the Project Company.  The EIA specifies the scope and conditions that must be implemented during the life cycle of the project.

There are a number of Dubai Municipality Technical Guidelines issued by the Environment Department of Dubai Municipality which set out relevant time frames, specific requirements and procedures for different projects and details exactly what should be included in the EIA Report.

These include details relating to the EPA, a list of all raw materials, machinery and equipment being used, potential sources of air emission, waste management programs, a location map, floor plan and machine and drainage lay out. Such EIA Report must be signed by either the duly authorised representatives of the Project Company’s shareholders or the proposed general manager of the Project Company and by an expert consultant which must be able to confirm that “all information in the EIA Report is true and correct and any discrepancies during actual operation of the facilities shall be the responsibility of the company”.

3. Approval

Upon the EPA Documents having been submitted to Dubai Municipality and the applicable fees being paid as described above, the Dubai Municipality should notify the applicant by way of email and SMS if the Environmental Clearance was approved or rejected. Given that the online system of Dubai Municipality and the DED are connected, the DED will be able to verify that the environmental clearance was obtained by the Project Company without submitting the original clearance letter.

Conclusion

We have extensive experience in dealing with power projects and the structuring component is a key element to ensure the viability and success of such projects.

For more information, please contact us on sectors@hadefpartners.com.

This article, together with any commentary, does not constitute legal advice. It is provided solely for information purposes on a complimentary basis, without consideration of any specific objectives, circumstances or facts. It reflects then current views of the writer which may modify in time and based on differing objectives, circumstances or facts. A writer's view may differ from views of colleagues and/or the firm. You should seek legal advice on each specific matter. Access to this article does not form an attorney-client relationship.