Renewable Energy Projects in Mexico, Brazil and...

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Presenting a live 90-minute webinar with interactive Q&A

Renewable Energy Projects

in Mexico, Brazil and Chile Leveraging Favorable Legislation and PPPs While Navigating

Pricing Issues, Regulatory Hurdles and Infrastructure Shortfalls

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

THURSDAY, AUGUST 25, 2016

Juan Francisco Mackenna, Partner, Carey, Santiago, Chile

John B. McNeece, III, Senior Counsel, Pillsbury Winthrop Shaw Pittman, New York & San Diego

Paulo H. Varnieri, Pillsbury Winthrop Shaw Pittman, Washington, D.C.

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Pillsbury Winthrop Shaw Pittman LLP

Renewable Energy Projects in Mexico

Strafford Webinars – Renewable Energy Projects in

Mexico, Brazil and Chile

August 25, 2016 John B. McNeece III

501 West Broadway, Suite 1100

San Diego, CA 92101-3575

Phone: 619.544.3258

[email protected]

Introduction to Renewable Energy in Mexico

6 | Renewable Energy Projects in Mexico

Mexico has Aggressive Goals for “Clean Energy”

Clean Energy in Mexico is broader than the US concept of “Renewable Energy”

Projections for 2016-2030 are for 35.5 GW of new Clean Energy generation

Corresponding annual requirements, i.e. obligation to acquire “Clean Energy

Certificates” or “CELs” as % of consumption, will grow over time

Limited incentives for Clean Energy beyond the requirement for CELs

The Goals

The 2012 Climate Change Law set a goal that by 2024 at least 35% of total

generation would be from clean energy sources.

The Law of the Energy Transition, effective 12/25/2015, added interim goals, i.e. at

least 25% by 2018, 30% by 2021 and 35% by 2024

Introduction to Renewable Energy in Mexico (cont.)


Clean Energy Defined

Includes US concepts of renewable energy, i.e. solar, wind, bio, geothermal

But also includes all hydro, nuclear and efficient cogeneration, among others

Current Generation of Clean Energy (2015):

Hydroelectric – 10%

Nuclear – 4%

Wind – 3%

Geothermal, Solar and others – 2%

Bio (e.g. from sugar mills) – 1%



Government Projections for New Clean Energy Generation 2016-2030

* Exchange Rate 8/19/2016 Source, SENER, Prodesen 2016-2030

Technology Capacity MW Est Cost $MM*

Hydroelectric 4,492 6,175

Nuclear 4,191 19,549

Wind 12,000 21,393

Geothermal 894 1,373

Solar (99.8% PV) 6,849 18,591

Bio 61 18

Efficient Cogen 7,045 6,755



Clean Energy Certificates (“CELs” from Spanish term)

Renewable generators get one CEL for each MWh produced

Efficient cogeneration gets one CEL for each MWh generated above specified level

of efficiency

But, only those generators that go into operation after August 11, 2014, can

receive CELs; for generators going into operation on or before August 11, 2014,

only increased capacity is entitled to CELs; eligibility to create CELs for 20 years

Bonus CELs for Distributed Clean Energy

The Mexican Energy Regulatory Commission (Comisión Reguladora de Energía,

or “CRE”) will confirm requirements are met, issue CELs and maintain registry

CEL Requirements

Required to be obtained by Suppliers, Qualified Users that are Market Participants,

holders of Legacy Interconnection Agreements (unless all energy is Clean Energy),

and end users that generate/import electricity without using transmission grid



CEL Requirements (cont.)

The Mexican Ministry of Energy (Secretaría de Energía, or “SENER”) determines

requirements for each year, beginning for 2018; once set, cannot be lowered

Set at 5.0% of total usage for 2018, 5.8% for 2019

Flexibility: Basic Rule - Up to 25% of the requirements in a particular year can be

deferred for up to 2 years but portion deferred will increase by 5% for each year

deferred; also, for first 4 years, up to 50% deferment if availability, cost constraints

Penalties for non-compliance – a monetary fine to be assessed by the CRE

CELs Can Be Traded

Tradeable through new wholesale market, beginning 2018; reported to CRE

Can also be bought and sold bilaterally through financial contracts

Procurement Opportunities in Mexico


The First Long Term Auctions – Awards March 31, 2016

Sole buyer in first auction was the Comisión Federal de Electricidad or “CFE,” the

former state power company, now an “independent state enterprise”

Auction for energy, for 15 year contracts, and for CELs, for 20 year contracts

Designed to foster competition, establish pricing, set the scene for bilateral deals

Viewed as very successful by Mexican government; many participants

Very low prices – Average $47.48 MW Energy/CELs; Wind $55.39, Solar $45.15

Wind Projects MWh per Year

Energy + CELs

Price per MWh

TAMS (2 projects) 585,731 $42.90 (av.)

YUC (4 projects) 798,290 $63.14 (av)

Total 1,384,021 $55.39 (av)

Procurement Opportunities in Mexico (cont.)


The First Long Term Auctions – Awards March 31, 2016 (cont.)

Very low prices – Average $47.48 MW Energy/CELs; Wind $55.39, Solar $45.15

Solar Projects MWh per Year

Energy + CELs

Price per MWh

AGS (1 project) 140,970 $47.95

BCS (1 project) 60,965 $48.06

COAH (2 projects) 1,710,913 $36.93 (av.)

GTO (2 projects) 808,189 $44.80 (av.)

JAL (1 project) 277,490 $47.28

YUC (5 projects) 1,020,333 $61.15 (av.)

Total 4,018,860 $45.15 (av)



Comments on the First Long Term Auctions and Pricing

ENEL SpA, through its subsidiary ENEL Green Power Mexico, S. de R.L. de C.V.,

made extremely low solar bids: 2 for Coahuila at an average of $36.93 / MWh and

1 for Guanajuato at $45.39 / MWh; overall ENEL average was $38.96 / MWh (all

prices are for Energy + CELs)

Average bid other than from ENEL was $54.66 / MWh

Note that ENEL had 17 failed bids (too high) and 28 no-bids (no economic offer)

Bid prices are adjusted by time of day pricing, varies by area

Evaluation of bid prices was adjusted by the variation between local prices of

energy and average nationwide price of energy

A comparable cost analysis by Lazard in November 2015 found that for crystalline

PV, the levelized cost of power would be $56 to $70 / MWh, assuming 40% equity

with 8% return and 60% debt at 12%, with low end of range assuming single axis

tracking and high end assuming fixed tilt; Lazard found that the cost could go down

as low as $46 / MWh for 2017 assuming $1.35 / watt for single axis tracking



Second Long-Term Auction – Awards to be made Sept. 30, 2016

Seeking 10,629,911 MWh each of Energy and CELs

Maximum price for Energy and CELs together is $60.01; however there is declining

maximum price, i.e. for each increment of 3.2% of the 10,629,911 MWh, the

maximum declines by an additional 0.83% of the $60.01, except that for last 5

increments there are substantial declines (5% or 10% each)

Other Opportunities, but the Issue will be Price

Future auctions, once per year

Bilateral contracts with Qualified Users, for energy and CELs

Self-supply (including self-supply consortia) for Legacy Interconnection Contract

deals, including purchase of pending transactions, but no CELs granted; however if

all energy is from Legacy deal, no obligation to acquire CELs

Distributed generation, with bonus CELs

Sale into the Wholesale Market, but question of financing

Regulatory Issues in Mexico

The Setting

Constitutional amendments to restructure Mexico’s hydrocarbon and electricity

industries became effective December 20, 2013.

Legislation implementing reforms became effective August 12, 2014; key law for

electricity is the Law of the Electrical Industry (“LIE” for the name in Spanish)

A number of reglamentos (regulations) providing more detail on implementation of

the reforms issued on October 31, 2014, including regulations for the LIE

Guidelines for granting and required acquisition of CELs issued October 31, 2014

Wholesale Market Bases (principles of the Market) issued February 24, 2015

Interconnection Rules issued June 2, 2015

The Law of Energy Transition issued December 24, 2015 (clean, efficient energy)

Decree for separation of parts of CFE, issued January 11, 2016

Government moving quickly to implement reforms, with many, many guidelines,

decrees, accords, manuals


Regulatory Issues in Mexico (cont.)

The Auctions

Not clear who the Buyer is, CFE (parent) or a new special purpose sub, CFE Basic

Service Supplier (created through separation of components of CFE); may affect

credit-worthiness, bankability

The standard form PPA presents other issues, including remedies on a Buyer

default; there is a complex remedy provision which gives the Seller the benefit of

its bargain, but requires substantial Buyer cooperation after default.

Legacy Interconnection Contracts

Parties who submitted an application for a permit under the former regime, i.e. prior

to August 12, 2014, could obtain an interconnection contract under the prior regime

(“Legacy Interconnection Contracts”), but many uncertainties

How these are treated is a big deal. One of the permits under the prior regime was

for “self-supply” (autoabastecimiento), including for self-supply consortia (generator

assembles off-takers, each of whom has ownership interest in a consortium);

SENER projects that 9565 MW of auto-supply generation to be built 2016-2030



Legacy Interconnection Contracts (cont.)

The Law of the Electrical Industry provides for continuation of key benefits for

renewables under Legacy Interconnection Contracts, e.g. capacity back-up service

– to be provided by CENACE (independent system operator and manager of

Wholesale Electricity Market) - but unclear how that will be done.

The Legacy rules require that by December 31, 2016 financing for the whole

project must be arranged, commitments made to acquire all the principal

equipment, and 30% of the anticipated total investment disbursed; as 12/31

approaches, there are major issues of interpretation of the 30% “disbursement”

Interconnection Rules

Two types of applications: an individual application and an application to be

considered as part of the national planning process for transmission and

distribution; individual has to pay for necessary system upgrades + actual

interconnection costs; applicants to be part of the planning process do not have to

pay for system upgrades, but only the interconnection costs.



Interconnection Rules (cont.)

Issues with Financial Guaranties (L/Cs): Big numbers; also, when released?

For an individual application, the financial guarantee must be provided upon

the signing of an Interconnection Agreement in an amount equal to the greater

of US$40,000/MW or the total estimated cost of the interconnection and any

system upgrades

For application for inclusion in the national planning process, the financial

guarantee must be provided at the time the application is submitted in the

amount of US$130,000/MW

Legacy Interconnection Contracts. Individual application does not pay study costs,

but no provision on the financial guaranties. Applicable? Probably yes, but

uncertain. For applicants for in the national planning process, must pay study

costs and provide the financial guaranties



Bilateral Contracts between Qualified Suppliers, Users

Qualified Supplier (QS), with permit from CRE, can sell to registered Qualified

Users (QUs) under long-term bilateral contracts for energy, CELs, other products

Qualified Users must use at least 1 MW currently (originally at one load point, but

can now include multiple load points), or otherwise as permitted by SENER

Pricing and the term of the bilateral contract are key issues

Possible issue with CFE tariffs. With limited exceptions, QU status is voluntary. If

CFE prices are low enough (recently descending), QUs won’t contract with QS.

Finally, question of how to frame contracts, direct PPA or contract for differences?

Public-Private Partnerships

CFE is permitted to enter into public-private partners by its governing law

Specific discussion of “associations” for transmission and distribution

Also possible for generation, but to date CFE prefers IPPs and Turnkey deals

Detailed federal law on “Asociaciones Público Privadas”



Public-Private Partnerships (cont.)

PPPs with states, municipalities, other agencies, for power purchase

Public-private partnership law (state by state) is best procurement mechanism

for state and local governments to buy power, but numerous issues, e.g.

statutory process of evaluation; favoring of auctions, unless specific

exemption; need to confirm that power purchase obligations are included

automatically in budget for government body, but issues with applicable laws

Credit Issues - Municipalities generally have poor credit, states uneven;

potential use of grant of security interest in federal participaciones.

Will Regulators Be Able to Constrain CFE Market Power?

Can CENACE and CRE ensure independence of market from CFE?

Even with the CFE split up, all CFE companies will report to the same Board; they

will, together, have an overwhelming share of generation capacity for some time


THANK YOU

21 | Acquisition of Mexican Power Projects

John B. McNeece III

501 W. Broadway, Suite 1100

San Diego, CA 92101

Phone: 619.544.3258

[email protected]

Pillsbury Winthrop Shaw Pittman LLP

Renewable Energy Projects in Brazil

August 2016

Paulo H. Varnieri 1200 Seventeenth Street, NW

Washington, DC 20036

Tel. +1.202.663.8000

[email protected]

Procurement Opportunities for New Renewable Energy Projects

Upcoming Auctions:

Reserve Energy Auction (Leilão de Energia de Reserva) scheduled

for September and December 2016. The Ministry of Mines and

Energy of Brazil (MME) announced in July that the auctions for

renewable energy projects (previously scheduled for July and October

2016) have been rescheduled for September and December 2016.

The first auction will be for hydro power energy only, whereas the

December auction will be for solar and wind projects.

23 | Renewable Energy Projects in Brazil

Procurement Opportunities for New Renewable Energy Projects (cont’d)

Auctions in the past year:

Energy Auction (Leilão de Energia A-5) in April 2016 – R$9.7 billion in

contracts for 29 new projects – 20 small hydro plants (Pequenas

Centrais Eletricas (PCHs), which are less than 50 MW capacity); 7

biomass plants; and 1 thermo plant.

In 2015 the MME promoted the third reserve energy auction (2nd in

2015) for contracting electricity from photovoltaic (PV) projects. 33

projects were contracted in this auction, compared with 31 and 30 of

the first and second auctions, respectively.



Types of action:

Leilão de Energia – Regular auction. Contract energy from existing

plants, new plants, or renewable energy plants only.

Leilão de Energia de Reserva – Contract surplus energy.

Leilões de Fontes Alternativas (LFA) – Auctions for Alternative

Sources. The LFAs are auctions for renewable energy. They were

created to improve the diversity of the Brazilian energy matrix.

Leilão de Projeto Estruturante – these are project-specific auctions.

Designed for projects with a strategic purpose (e.g. UHE Santo

Antonio, UHE Jirau, and UHE Belo Monte)



Delivery of Energy:

Auction A-5: Project will start delivering energy 5 years after the

auction.

Auction A-3: Project will start delivering energy 3 years after the

auction.

Auction A-1: Supply of energy will start 1 year after the auction.


Regulatory Challenges in Brazil

PPP in Brazil - Legal Framework

Law 11,079/04 – PPP law (establishes general rules regarding

contracting of a private partner)

Law 8,987/95 and 9,074/95 – Concession laws

Law 8,666/93 – Procurement law


Regulatory Challenges in Brazil (cont’d)

Public-Private Partnerships (PPPs):

General definition: PPPs in Brazil have the form of a concession, in

which the government (at any level) grants a private party the right to

provide a public service and receive compensation from the public

party, the users, or both. It is not a PPP if there is no payment from

government entity to the private party under the concession.

Forms of PPPs:

Sponsored concession (concessão patrocinada): Private partner receives (a) fees

charged to the users and (b) payments from the contracting government entity for

the services provided.

Administrative concession (concessão administrativa): Private partner receives

payments only from contracting government entity. The public party is the direct or

indirect user of the services.



Certain requirements:

The contract term must be for at least 5 years;

The contract amount must be at least R$20 million;

The contract cannot be only for employment, provision and installation

of equipment, or construction of public work;

The public partner cannot hold the majority of the voting shares of the

SPV;

At the end of the term of the contract, the asset will revert to the

government partner.



Energy Projects - Regulatory Framework

Law 9,427/96 – Created ANEEL (Agencia Nacional de Energia

Eletrica).

Law 10,847/04 – Created EPE (Empresa de Pesquisa Energetica)

Law 10,848/04 and Decree 5,163/04 – regulates the energy market

(sale and purchase of energy) in Brazil

Resolutions and Decrees issued by ANEEL



Regulators and Market Participants

ANEEL – independent agency that oversees and regulates the

generation, distribution, transmission, and trading of energy in Brazil.

Among other responsibilities, ANEEL determines (a) the tariffs in

connection with the sale of energy in the local market and (b) the

tender rules in an auction.

EPE – The Energy Research Company provides services in the areas

of research and development with respect to the national energy

sector. It also controls the eligibility process of applicants for energy

auctions. Bidders need to be accredited with EPE.



ONS (Operador Nacional do Sistema) – it is the entity that

coordinates and controls the operations of generation and

transmission of energy in the national interconnected systems (SIN).

CCEE (Camara de Comercializacao de Energia Eletrica) – conducts

the auctions. The trading procedures and rules are approved by the

ANEEL.



Markets for Purchase and Sale of Energy

Regulated Market (Ambiente de Contratacao Regulada – ACR):

public auctions for the purchase of energy.

General rule: the bidder at an auction offers to sell energy at the lowest price per

MWh, which is subject to a pre-determined price cap.

Price generally: costs of project + investment return

Fee Market (Ambiente de Contratacao Livre – ACL): Market in which

consumers, non-regulated agents, and traders purchase energy.

Contract terms are freely negotiated among the parties.



Term of PPAs:

Regular auction

15 to 30 years for new projects

1 to 15 years for existing projects

10 to 30 years for renewable energy projects

Market average for wind and solar: 20 years

Reserve Energy Auction

Up to 35 years.



Certain Requirements:

ANEEL determinates the eligibility of a project to participate in an

auction after registration with ANEEL.

Bidders have to demonstrate environmental license of the project,

land lease agreements, grid access, among other documents and

certifications.

The SPV that has been formed to operate the power plant must be a

Brazilian corporation (there is no restriction on the ownership of the

shares of such SPV)



Certain Requirements (cont’d):

Authorization and operating requirements:

There are requirements in connection with the construction and operation of power

plants, including the expansion of transmission lines and distribution of energy

ANEEL is the agency responsible for granting such authorizations or concessions

in accordance with its own Resolutions and Decrees

The requirements depend on the type of power plant and on the technical and

financial capabilities of the concessionaire.

Environmental licenses –The process of obtaining the environmental consists of 3

stages: previous license; installation license; and operating license.



Certain Requirements (cont’d):

Unbundling requirements: Separate the generation, transmission,

and distribution activities.

Restrictions on distribution companies that are connected to the SIN (e.g., they

cannot operate in power generation, energy transmission)

Restrictions on generation companies that are connected to the SIN (e.g., must not

be an affiliate of distribution companies connected to the SIN)



Other Regulatory Factors:

Taxes – There are taxes levied on energy transactions which are

generally paid by consumers.

Land rights – Ownership of land includes rights to surface,

underground, and aerial space, subject to certain government’s rights

(e.g., oil and natural gas, archeological and pre-historic sites)

ANEEL may determine the installation of transmission and distribution systems in

private land as public interest. The landowner may be entitled to indemnification.

This could affect timing and costs.


Navigating the Economic and Political Environment

There is great potential for growth of the renewable energy sector in

Brazil – particularly wind and solar. But there still are some obstacles to

attract more interest from investors.

Costs

Most of power plants are located far away from consumption centers; as such, it

requires significant investments to implement transmission and distribution of

energy.

High costs of equipment and technology

Costs related to the environment (licenses, land, etc.)

Local communities

Government programs – It takes time to show results, especially at a

time of transition.


Navigating the Economic and Political Environment (cont’d)

Regulatory storm – the energy sector in Brazil has been subject to a

variety of rules and regulations issued by the government, which

creates uncertainty.

Taxes – Lack of significant tax incentives.

Financing – BNDES offers loans at below-market rates; however, at

least 60% of a project’s parts and services must be acquired locally.

Conventional lines of credit are still expensive.

Debt capital markets (foreign and domestic) and multilateral lenders may gain

more space, as BNDES signals that it will reduce its long term debt to

infrastructure projects.

Exchange risk – PPAs in local currency.


Choosing Local Partners

Business partner: Doing business in Brazil (especially in public sector

procurement) requires intimate knowledge of the local markets.

Choosing the right local partner will help foreign investors understand

key local issues and what strategies are likely to succeed.

Relationship with local lenders and financial investors (private equity

funds, pension funds, etc.).

Good interaction with regulators.


Choosing Local Partners (cont’d)

Financing partner:

BNDES – It may provide financing for up to 70% of the project, but it

has the local content policy.

Foreign debt may be a financing option. But that would require contracting a

currency hedge.

Financial investors - Private equity funds and pension funds


Best Practices

Identifying local partners

Thorough due diligence process

Partnership model

Corporate governance

Compliance with applicable rules and regulations


August 25, 2016

Isidora Goyenechea 2800, 43rd Floor, Las Condes

Santiago - Chile

Tel:+56 2 2928 2200 / Fax:+56 2 2928 2228

[email protected]

www.carey.cl

- Strictly private & confidential -

Renewable Energy Projects in Chile

August 25, 2016

Introduction to Renewable Energy in Chile

I. Non Conventional Renewable Energy (NCRE) are those

whose primary source derives from:

biomass

hydraulic energy with maximum capacity is less than

20.000 kW

geothermal energy

solar power

wind power

energy of the sea and

other types of generation determined by the National

Energy Commission.

II. Why NCRE

i. Eco-friendly power supply

ii. Social acceptance - higher than traditional forms of energy

generation.

iii. Competitiveness.

45

Chile’s great potential for NCRE:

•More than 1,865,000 MW of wind, solar

and hydro energy.

•Over 2,000 MW of geothermal power.

•More than 2,000 MW of biomass.

August 25, 2016

I. Procurement opportunities for new renewable energy projects in Chile

46

1. Exemption in transmission charges:

- Total excemption for NCRE of 9 MW or less

- Partial exemption for NCRE between 9MW and 20 MW.

2. Net Metering: Small Generation Projects with Renewable Energy are

able to inject power excedents to distribution lines.

3. The 20/25 Law. 20% of power injection deriving from renewable

energy sources by year 2025.

4. Regional integration. AES Gener currently exporting electriciry to

Argentina. Potential interconnection with Peru.

5. Tender Process for energy blocks from NCRE, adds article 150 ter

to the LGSE for systems with an installed capacity of 200 MW or

more.

Law No. 19.940, year 2004.

Law No. 20.571 the «NCRE Law»,

year 2008.

Law No. 20.698, year 2013.

Law No. 20.698, year 2013.

LEGAL MECHANISMS BOOSTING NCRE

August 25, 2016

II. Regulatory challenges in Chile

1. Inclusion of NCRE in article 2° of the LGSE, in order to be

considered “concessions”.

2. Modernization of Technical standards, that materialize the

incorporation of NRCE to the power matrix.

3. Flexiblization of the electrical system to manage larger levels

of uncertainty due to higher NCRE incorporation.

4. Conflicts with mining concessions.

5. Interconnection to the system.

6. Implementation of direct support mechanisms for investment

initiatives in NCRE.

7. Marginal cost system, current regulation establishes system

based on marginal costs that affect NCRE, where their marginal

cost can be zero, reducing financing opportunities.

47

August 25, 2016

III. Navigating Chilean Reforms

LEGAL EVOLUTION FOR NCRE’S

To favor NCRE’s, the General Electric Services Law has been

amended several times.

Assuring power generation companies

the right to sell at spot price.

Releasing certain NCRE power plants

from transmission tolls.

20/25 obligation.

Enabling distribution generation and

net metering.

Establishment of «Development Poles»

New tolls regime.

48

August 25, 2016

IV. Political Environment

The «Energy 2050 Agenda»

Reliable,

Sustainable,

Inclusive, and

Competitive

i. Fostering NCRE projects (i.e. 20/25) and implement efforts to

achieve 70% by 2050.

ii. Commitment to removing NCRE barriers.

iii. Active role of the State in planning, regulation and management

of the sector.

iv. Boost local power resources.

v. diversification in the use of technologies.

vi. Promotion of the development of socially efficient self-

consumption NCRE market that affects all economic players.

49

August 25, 2016

V. Economic Environment

GDP 2015: USD 240 billion, GDP per cápita (PPP) 2015:

USD 23,563

Open economy.

25 trade agreements, including Free Trade Agreements

with main trading partners.

Autonomous Central Bank, responsible for means of

payment and price level.

Inflation-targeting policy: 2 - 4% over 24-month horizon.

No capital controls.

Double taxation avoidance agreements in force with 26

countries.

50

Ranking on the ease of doing business: No. 48 of 189

Source: World Bank, Doing Business Report 2015.

August 25, 2016

VI. Choosing local partners

I. No limitations to foreign companies’ acquisition of interests

in the electrical market. The incorporation of a Chilean subsidiary

is sometimes required.

II. Knowledge of the electric regulation.

III. Small but growing market.

IV. Need of resources and technologies.

In the The last DisCos Tender Process most

bidders where international companies with

subsidiaries incorporated in Chile.

51

Companies limited by Shares or «SPA» is the most flexible type of vehicle to incorporate a company in Chile. It has the same benefits as any stock company but can be constituted by one party (legal entity or not) or more, have subsidiaries and holdings.

August 25, 2016

VII. Best Practices

COMPLIANCE WITH LOCAL REGULATIONS

I. Electrical regulation.

II. Non specific regulation:

i. Environmental regulation

ii. Mining Law

iii. Antitrust Law

III. Non-regulatory challenges: “social license to operate”.

SEC.

Sanctions: up to 10 million dollars, revocation of

approval.

Enforced by Antitrust Tribunal and general

economic attorney.

52

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