VU The Constitution of 15 September 1992;
VU Constitutional Law No.92/AN/10/6thL of 21 April 2010 revising the constitution;
VU Law No.42/AN/14/7thL of 25 June 2014 reorganizing the Ministry of Energy responsible for natural resources;
VU Decree No.77-079/PR/MI of 20 December 1977 concerning the status of the Electricity of Djibouti;
VU Decree No.84-1754/PR/MIDI of 23 December 1984 amending the status of the Electricity of Djibouti;
VU Decree No.2013-0044/PRE of 30 March 2013 appointing the Prime Minister;
VU Decree No.2013-0045/PRE of 31 March 2013 appointing members of the government;
VU Decree No.2013-0058/PRE of 14 April 2013 on the responsibilities of departments;
VU Circular n°320/PAN of 14/06/15 calling for the fifth public meeting of the National Assembly;

The Council of Ministers heard in its meeting of March 03, 2015.

PART I: GENERAL PROVISIONS

SECTION 1

Definitions

Article 1: For the purposes of this Act and the resulting regulations, the following definitions are allowed:
- Competent authority: a legal entity of public law entitled to conclude, sign or issue the legal instruments necessary to carry out the activities referred to in this Act.
- Competent Authority: a legal entity of public law authorized to sign concession contracts between the State and a legal person of public or private law.
- Local authority: representative of a Decentralised Territorial Communities.
- Authorization: legal act issued by the competent authority, allowing the realization of an activity in the electricity sector, and recognizing that the electricity producer fulfils the conditions and obligations to which it is subject by this Act and its implementing legislation.
- Concession: an exclusive contract between the State and an electricity producer, allowing it to operate the public domain within specific territorial limits, with a view to ensuring the production of electric energy on the basis of a specifications.
- Charge sheet: document presenting the main technical and administrative provisions that must be carefully respected by the electricity producer.
- Conciliation: Amicable dispute resolution procedure between the various stakeholders in the electricity sector.
- Control: all operations or actions carried out to verify compliance with the activities, equipment, facilities and procedures with the existing texts and standards.
- Declaration: administrative formality carried out with the competent authority to carry out certain activities under this Act.
- Renewable energy: electric energy produced from renewable energy sources (solar, wind, geothermal, tidal, etc.).
- Export: sale of electricity produced in the Republic of Djibouti to a public or private person, intended for sale or use in the market of a foreign country.
- Provision: provision of electricity to users.
- Distribution Network Manager: a natural or legal person responsible for the operation, maintenance and development of the distribution network in a given area.
- Transport Network Manager: a legal entity responsible for the operation, maintenance and development of the national transportation network, its interconnections with other networks, and/or the management of energy flows.
- Import: purchase of electricity from a public or private person in a foreign country, intended for sale or use in the national territory.
- Licence: Legal act issued by the competent authority to a qualified electricity producer, having been selected to carry out electricity production activities with the aim of injecting this energy into the national electricity grid.
- Private partners: Companies or companies, national or foreign, wishing to invest in electricity production.
- Interconnection station: location of all equipment, equipment or facilities to ensure interconnection.
- Producer: a natural or legal person who has the right to operate a facility to generate electricity from any source of energy.
- Self-producer: a natural or legal person, producing electricity for its exclusive use, thanks to renewable energies and who does not undertake the injection of electricity on the national network.
- Small producer: A natural or legal person who produces electricity for its own consumption and injects the excess of its production into the national network.

- Grand producer: A natural or legal person whose main activities are the production of high capacity electricity to inject it on the national network.
- Production: electricity generation by any means.
- Decentralised production: electricity generation unit designed to meet the electricity needs of users located away from interconnected networks and not able to connect to them in the medium term.
- Electrical network: a set of works, facilities and transport and distribution equipment to transport electricity from production sources to delivery points.
- Transport network: High voltage electrical networks
- Distribution network: Medium and low voltage electrical networks.
- Renewable energy sources: sources that exist naturally and are continuously renewed by nature.
- Auxiliary services: services required for electricity transmission and distribution systems.
- Standards and standards: technical, statistical and dynamic conditions required by this Act and its implementing legislation for the products, facilities and equipment used in the activities of the electricity sector.
- Use: physical or legal person connected to the distribution network to be supplied with electricity at the point of delivery.

SECTION 2
Objectives and Fields of application

Article 2: The purpose of this Act is to:
- Promoting private sector participation and competition in the production of electrical energy;
- Define the legal framework to develop the production of electric energy by private operators;
- Reduce electricity costs;
- To promote the harmonious development between demand and supply of electricity;
- Promote the production of electric energy from renewable energies;
- Authorize the self-production of electricity from renewable energies;
- Create the economic conditions allowing the rentabilization of investments in the electric energy sector;
- Allow access to electric energy for all layers of the population and all economic operators of the country;
- Respect the conditions of fair and fair competition and the rights of users and operators;
- Ensure that electricity sector regulations are transparent and predictable.

Article 3: This Act aims to regulate the activities of independent electricity producers throughout the territory of the Republic of Djibouti.
Therefore, the provisions of this Law shall be subject to the activities of the production, purchase and sale of electrical energy carried out by independent producers from renewable energies and/or traditional sources of energy (fossiles).

SECTION 3
Institutional arrangements

Aricle 4: The role of the Minister of Energy, responsible for Natural Resources.
The Minister of Energy responsible for Natural Resources grants the licences and concessions in accordance with the provisions of this Act and removes them, if any, according to the provisions of this Act.
Their issuance is accompanied by a licence or concession contract signed by the Minister of Energy, responsible for Natural Resources and licensees of the licence or concession.

Article 5: Role of the Regulatory Service
Within the Energy Directorate of the Ministry of Energy responsible for Natural Resources (MERN) there is a Regulatory Service. This service is responsible for regulating and regulating the activities of the Electricity Sector, including the production and sale and purchase of electrical energy, in accordance with the provisions of this Act.

Article 6: The Regulation Service aims to:
- Promote the rational development of the electrical sector;
- Ensure the harmonization between supply and demand for electric energy;
- Ensure the economic and financial balance of the electricity sector and the preservation of the economic conditions necessary for its sustainability;
- Ensure the preservation of consumer interests and the protection of their rights in the provision and quality of electrical energy;
- Ensure transparency and impartiality in the competition process and private sector participation in the production of electrical energy;
- Organize meetings with the Public Institution “Electricity of Djibouti” and the companies holding the production licences and the dealers.

Article 7: Attributions of the Regulatory Service

7.a: Advisory powers:

The Regulatory Service informs the Minister of Energy, responsible for Natural Resources on all draft legislation and regulations relating to the electricity sector. The Regulatory Service shall report on matters relating to that sector or that are likely to have an impact on the design of sectoral policy.
In accordance with the provisions of this Act, the Regulatory Service may propose to the Minister of Energy any draft decree concerning:
- The rights and obligations of companies, holders of a licence or concession for the production of electrical energy, including the standard contracts and specifications applicable to these activities;
- Access of third-party producers to the transport or distribution networks of the ED after consultation with the latter;
- The formalities, deadlines and actions required in administrative procedures under the Ministry of Energy under this Act.

In its proposals to the Minister of Energy responsible for Natural Resources, the Regulatory Service ensures the preservation of the legitimate interests of consumers, the Public Institution "Electricity of Djibouti" and the licensed or concessionary companies. To this end, the Regulatory Service consults consumer associations, civil society representatives, EDD and licensed and/or concession-owned companies.

The announcement of the consultation is made at least three months in advance by any appropriate means. It specifies the topics on which licensees or concessions, as well as consumer associations, are invited to issue a notice and the time required to do so.

7.b: Individual decision responsibilities

In accordance with the provisions of this Act, the Regulatory Service shall exercise the following responsibilities:
- Instructs applications for licences or concessions relating to the production of electrical energy;
- It ensures compliance with the terms of licences and concessions, in particular those relating to the obligation of continuity of service in quantity and quality;
- He may propose to the Minister of Energy any general amendments to the licences, concessions or specifications, in accordance with the provisions of this Act;
- It ensures compliance with the technical standards applicable to companies in the electricity sector;
- It ensures competition in the electricity sector.
The Regulatory Service receives and is instructed to submit them to the Minister of Energy, responsible for Natural Resources:
- requests for exemption from the provisions of this Act;
- applications for licensing and concession;
- applications to amend licences and/or concessions or their terms of reference for the purposes of this Act;
- disputes between stakeholders in the electrical sector;
- litigation on the quality of services.

PART II: ELECTRICITY PRODUCTION ACTIVITIES

SECTION 4

Exercise of electricity-related activities

Article 8: The production, transport and distribution of electric energy is currently provided exclusively by the Public Institution “Electricity of Djibouti (EDD)” on the entire territory of the Republic of Djibouti in accordance with Decrees No.83-0171/PR/EDD of 02/02/1983 and No. 85- 1224/PR/MIN of 23/09/1985 amending the EDF specifications.

Now, in addition to ED, private independent operators are allowed to produce electricity.

Article 9: However, EDD will retain monopolies of transport and distribution throughout the national territory.
The EDD therefore remains the only owner of the distribution network and the transportation network throughout the national territory.

Article 10: On the whole of the national territory, the purchase of electric energy is permitted only to the public establishment “Electricity of Djibouti”. The EDD is therefore the sole purchaser of any electricity produced by the entities receiving licences or concessions for the production of electricity.

Article 11: The connection of independent producers holding a licence or concession and of small producers to the distribution and transport network is carried out by EDD on their application and fees, in accordance with the above-mentioned EDC terms of reference.

Article 12: With the exception of where an individual produces electricity for his or her own personal consumption, any natural or legal person considering the production of electrical energy by any means, must first obtain from the Minister of Energy, responsible for Natural Resources a licence or a concession of production.
The issuance of a licence or concession of production shall be subject to the prior realization of the following conditions:
- The independent producer must submit to the Ministry of Energy a project deemed reliable, provide the elements required by this Act.
- He must negotiate and sign a purchase contract with the ED: The negotiated purchase price must be competitive.

Article 13: The license or concession of electricity production is issued by the Minister of Energy, responsible for Natural Resources.

Article 14: Foreign natural or legal persons may be candidates for a licence or concession as a private investor or in the tendering process, subject to the requirements and obligations set out in this Act.

SECTION 5
Licensing procedures and criteria or concessions for a private investor

Article 15: The procedure for licensing or concession is as follows:

Any application for a licence or concession is addressed to the Minister of Energy in charge of Natural Resources who forwards the file to the Regulatory Service for instruction and advice.
In the case that the candidate files more than one application for a licence or concession, the instruction is made in such a way that they can be granted or denied at the same time.

In the event that a licence or concession application is rejected, the Minister of Energy responsible for Natural Resources must provide the applicant with the reasons for the rejection. The reasons for rejection must be objective, non-discriminatory and properly documented. A candidate whose application has been rejected may make a judicial appeal to the competent Djiboutian courts for annulment of the decision to reject the decision before the administrative tribunal.

In the case that the Regulatory Service has given a favourable and unqualified opinion, the Minister of Energy, responsible for Natural Resources, has a 15-day period to issue the requested licence or concession.

The company wishing to obtain a licence or concession is not exempt from obtaining all the authorizations required under the applicable regulations, including urban planning, personnel security, the public and the environment. It must also comply with any applicable competition provisions.

Article 16: Applications for licences or concessions must provide the following information on the candidate company considering the exercise of an electrical energy production activity:

Company description:
- the name or social reason, nationality, domicile and professional address of the applicant;
- the statutes, names and names (s), quality, nationality of all persons with a responsibility in the management of the enterprise: President, Director, Manager, members of the Board of Directors, etc.;
- any document justifying technical and operational capacity, experience in the field of activity for which a licence or concession is requested;
- any document that warrants financial resources and funding capacity.

Activity description:
- technical means and energy balances;
- an environmental impact assessment and/or any document justifying the ability to ensure the safety of people and the protection of the environment;
- a draft terms of reference;
- a guarantee for civil liability that may be incurred due to the activities to be carried out;

Article 17: At the time of filing of the application file, a filing receipt is issued to the applicant.

Article 18: The Regulatory Service reviews the application on the basis of the following criteria:
- the ability of the candidate company to comply with all its obligations;
- the ability to carry out the activities for which the licence or concession is requested;
- experience in this field of the candidate company, the honesty of the shareholders and directors of the candidate company;
- the ability to ensure the rules of personal and public safety, environmental protection and urban planning regulations;
- the ability to assume civil liability arising from the activity for which the licence or concession is requested;
- the development of power generation capacities based on energy sources in line with the current sectoral policy;
- the safety of electrical systems, associated installations and equipment,
- appropriate environmental protection and appropriate land use.

Article 19: The Regulatory Service has 30 days from the date of receipt of the application file to submit its notice to the Minister of Energy responsible for Natural Resources. The opinion of the Regulatory Service is motivated.

Article 20: The Minister of Energy responsible for Natural Resources has 15 days from the notice of the Regulatory Service to issue or refuse the licence or concession requested.

The licence or concession shall be granted for a specified duration according to the electricity production technology and the installed power. The license and the concession are
renewable according to the same criteria.

The issuance of the licence or concession is accompanied by the signing of an agreement between the Minister of Energy responsible for Natural Resources and the licensee of the licence or concession.

The Convention defines the rights and obligations of the parties.

Article 21: The licence or concession may be renewed in the same form for a period not exceeding the original duration.
Renewal is of law if the licensee has fulfilled the obligations defined by the agreement.

SECTION 6
Licensing or production concession procedure issued in the context of tender

Article 22.a: The use of independent production is carried out in the context of tenders launched by the Regulatory Service.

The Regulatory Service of the Ministry of Energy responsible for Natural Resources shall, by all appropriate means, issue a call for tenders in order to receive the necessary electrical energy supply offers from companies.

The tender file specifies:
- the desired location of the new production facilities, their production capacity and the type of energy used;
- the duration of the purchase contracts to be concluded between the ED and the independent producer;
- a draft energy purchase contract (Power Purchase Agreement or “PPA”) that describes the terms and prices on which EDD proposes to buy energy to the independent producer;
- the financing conditions for the connection of new production facilities to the network;
- the terms and conditions of tendering of tenders;
- the different stages of the call for tenders.

The tender will include at least two steps:

A pre-selection stage in which the Regulatory Service verifies that bidders meet the licensing or concession criteria set out in the Act and a selection stage.

The criteria for selecting the award must be precise, transparent and objective criteria.

Article 22.b: Responses to the tender are addressed to the Regulatory Service. The Regulatory Service may entrust the evaluation of offers to a specialized study office in this area.

Article 23: The Regulatory Service has 30 days to make a decision and notify the results of the tender to the Minister of Energy responsible for Natural Resources.

The licence or concession for the production of electric energy is granted by the Minister of Energy, responsible for Natural Resources to any company selected after a call for tenders for independent production, launched by the Regulatory Service of the Ministry of Energy, responsible for Natural Resources.

Article 24: The grant of the license or concession is published in the official newspaper of the Republic of Djibouti.

SECTION 7
Procedure for amending licences and concessions

Article 25: Amendments to the licences, concessions or specifications of electricity producers may be made.
The reasons for these changes must be objective and non-discriminatory.
The Regulatory Service proposes to the Minister of Energy the proposed amendments.

Article 26: When the Regulatory Service provides for an amendment to a licence, concession or specifications, on its initiative or on the request of an electricity producer, it shall inform the producer concerned about the proposed amendments.

The motivated project must be brought to the attention of industry operators.

Article 27: The Regulatory Service shall specify the time limit, which may not be less than 30 days, during which the licensee of the licence or concession may express its opinion on the amendment envisaged by the Regulatory Service and request an hearing.

Article 28: The Regulatory Service will have to hear every electricity producer who has requested it.

Article 29: The decision to amend a licence, concession or specifications is published in the Official Journal of the Republic of Djibouti.

Article 30: The decisions of the Regulatory Service concerning the modification of licences and/or concessions or terms of reference are subject to judicial appeals to the competent Djiboutian courts.

SECTION 8
Renewable energy

Article 31: Renewable energy is considered a national wealth that contributes significantly to the security of the country's energy supply and the protection of the local and global environment. The following energies are considered renewable energy:
- Geothermal energy;
- Wind energy;
- Thermal and photovoltaic solar energy;
- Hydraulic energy;
- Biomass energy;
- Marine energy.

Article 32: The State ensures the promotion and development of renewable energy. As such, the Ministry of Energy, responsible for Natural Resources, is responsible for the definition of renewable energy development policy for electricity generation and for setting short, medium and long-term objectives.

Article 33: The Minister of Energy, responsible for Natural Resources, must take into account, during the integrated resource planning process, the targets set for the development of renewable energy and energy policy. Specifically, the planning process must take into account the reliability of the network and the access constraints resulting from the addition of new installations for the production of electricity connected to the network.

Articlt 34: The independent production of electricity from renewable energy facilities, the size of which is greater than a Limit Value “VL”, can only be exercised after obtaining a licence or a production concession either by calling for competition or on private initiative. The limit value of the size of these facilities will be detailed in the application texts of this Act.

Article 35: Any natural or legal person wishing to produce electricity from renewable energy for its own consumption, and considering injecting its surplus into the national electricity network of EDD, is considered a small producer.

This person has the right to sell his or her surpluses exclusively to the Public Institution “Electricity of Djibouti”, provided that he or she meets the criteria for obtaining a licence and otherwise meets the requirements. These conditions will be specified in the legislation of application of this Act.

If the small-producer has an electric power supply subscription contract with the EDF, the EDF invoices the electrical energy supplied according to the EDF sales rate.

The energy injected by the small producer to the EDD network is calculated according to the agreed purchase rate between EDD and the small producer, on the understanding that the costs and production constraints are very different.

Article 36: Any natural or legal person wishing to produce electricity from renewable energies for their own consumption, and not considering the injection of this electricity on the national network, is considered an Auto-productor. It has the right to produce this electricity exclusively for its own consumption without requiring a production license, provided that:
- The point of production and the point of energy consumption are on the same site;
- These energy facilities do not exceed a Limit Value set out in the implementing legislation of this Act.

The self-producer does not have the right to sell or sell to third parties, either free of charge or expensive, the electric energy produced for its own consumption. ED may control at any time in cases of suspicion of fraud.

Any connection of electrical energy obtained directly or indirectly through illegal or fraudulent connections constitutes a flight and shall be punished by the penalties provided for in articles 495 et seq. of the Criminal Code.

If the self-producer has an electric power supply subscription contract with the EDF, the EDF will charge the energy provided according to the EDF sales rate.

Article 37: The conditions for the sale of surpluses and the upper limits will be detailed in the application of this Act.

The sale of surpluses to the ED shall be based on a “purchase type contract” which shall be defined in the texts of application of this Act.

TITRE III : ACHAT RATES

Article 38: Purchase rates are negotiated freely between DDU and independent producers with a licence or production concession.

Article 39: The negotiated purchase rates, and after notice of the regulatory service, will be approved by Order in Council of Ministers on Proposal by the Minister of Energy responsible for Natural Resources.

Article 40: The rates will need to ensure sufficient income levels to allow licensees of the licences or concessions to obtain a normal rate of profitability of their investments. However, they will need to be consistent with costs.

Article 41: The rate of profitability of the licensee of the licence or concession will be calculated, taking into account estimates of expenditures that will include:
- Amortization of the electricity production facility, in accordance with agreed rules;
- The costs of generating or purchasing electricity or auxiliary services;
- Salaries, fees and auxiliary costs;
- Other operating expenses, taxes and taxes according to the rules in force;
- Costs arising from compliance with all regulatory obligations;
- costs arising from compliance with public service obligations and costs under transitional provisions.
Electricity producers are required to maintain an analytical accounting.

Article 42: The normal rate of profitability will be the rate of profitability on capital which, in view of the risks to which investors are subject, is sufficient to allow the electricity producer to attract capital again.

PART IV: SANCTIONS

Article 43: The Regulatory Service shall, within the framework of the implementation of the responsibilities defined in section 7.b above, have a power of sanction and control. It punishes the failures that it finds on the part of independent electricity producers exercising the activity of electricity production.

Offences to the provisions of the Act are found by duly authorized staff of the Regulatory Service and sworn to that effect.

Article 44: The Regulatory Service punishes breaches of the provisions of a terms of reference, law, regulation, licence or concession contract.

Article 45: The Regulatory Service remains the author of the failure to comply with the rules applicable to its activity within a specified period of time.
The Regulation Service shall make public by any appropriate means the stipulations.

Article 46: When the author of the breach fails to comply with the applicable rules within the time limit set by the Regulatory Service, the latter shall, without prejudice to any criminal sanctions against the electricity producer, impose the following penalties duly motivated:
- Total or partial suspension of the right to produce electrical energy;
- Or, in the event of recidivism, withdrawal of the licence or concession described above;
- A monetary penalty commensurate with the severity of the breach.
Monetary penalties are recovered as State claims and paid to the National Public Treasury.

Article 47: The procedure for withdrawal of licences or concessions is as follows:
As soon as it becomes aware of a serious and manifest violation by the licensee of a licence or concession of its legal, regulatory, or contractual obligations, the Regulatory Service shall establish, as soon as possible, a record relating to the alleged facts, breached rules and actions already taken against the licensee and to the reasons for recommending the withdrawal of the licence or concession.

It includes an assessment of the licensee's previous behaviours.

Article 48: The Minister of Energy, responsible for Natural Resources, shall grant the licensee or the concession a period not exceeding 30 days from the notification referred to in the preceding paragraph to submit its written comments.
Subsequently, the Minister of Energy in charge of Natural Resources has a period of 20 days from the date on which he heard the licensee of the licence or concession to withdraw the licence or concession or to reject the application of the Regulatory Service.
A person whose licence or concession contract is withdrawn may appeal to the competent courts.

Article 49: In cases of withdrawal of licence or concession, the Minister of Energy, responsible for Natural Resources, shall determine, after notice of the regulatory service, the conditions and conditions under which the licensee shall cease its activities.
An interested party whose licence or concession has been withdrawn may make any judicial appeals that it considers appropriate.

Article 50: Any ruler of law or fact who has exercised without having previously obtained a licence or a concession of production shall be punished by a prison sentence of one to three years in prison and a fine of 1,000,000 FD to 3,000,000 FD, or one of these two sentences only in accordance with the provisions of the Penal Code.

PART V: OTHER PROVISIONS

Article 51: The licences or concessions issued under this Act are personal. They cannot be transferred or transferred to a third party without the prior and written consent of the Minister of Energy, responsible for Natural Resources. The Minister of Energy, responsible for Natural Resources, can only give valid agreement if the conditions below are fully and cumulatively satisfied:
- The assignor must have completed the work completely, and have put in place and effectively operational the production facilities for which the licence or concession was issued;
- The assignee must meet the criteria and conditions required to obtain the licence or concession as specified in this Act;
- The written commitment of the assignee of the prosecution and compliance with all the obligations contained in the terms of reference issued to the assignor.

Failure to comply with these conditions is punishable by the pure and simple withdrawal of the licence and/or concession.

Article 52: Orders made in Council of Ministers on the proposal of the Minister of Energy for Natural Resources will determine the conditions for the application of this Act.

PART VI: TRANSITIONAL PROVISIONS

Article 53: Any natural or legal persons who engage in an activity within the scope of this Act shall have a period of 6 months from the date of its entry into force to comply with it.
Orders No.83-0171/PR/EDD of 02/02/1983 and No.85- 1224/PR/MIN of 23/09/1985 amending the EDF specifications remain in force.

Article 54: These provisions repeal all other provisions previously contrary to and relating to the electrical energy sector in the Republic of Djibouti.

Article 55: This Act will be published in the Official Journal of the Republic of Djibouti upon promulgation.