New proclamation to ease energy development investments

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A draft amendment for ‘Geothermal Resource Development Proclamation No. 981/2016’ that will include the exemption of taxes is tabled to parliament. The draft amendment will consider the energy development as other mining and petroleum investments.
The preamble of the draft amendment of the proclamation stated that the amendment aims to improve incentives for companies who are engaged in the investment of energy, which consume huge amount of resource.
The proclamation is not also fit with the licenses given under mining works and legal frameworks that were signed before the enactment of Geothermal Resource Development Proclamation, according to the preamble of the draft amendment.
It added that the behavior of geothermal development works has correlated with the work of other mining and petroleum development that needs similar tax calculation and the proclamation needs to add required incentives for the sector.
The title of part five of the proclamation ‘Administration, compensation, exemption from customs duties, license fees and environmental safety’ has changed by ‘administration, compensation, exemption from customs duties and taxes, income tax, license fees and environmental safety’.
Currently seven companies have received a geothermal development license and are undertaking the exploration work. From the stated licenses two companies have agreed with the government on ‘power purchase agreement’ and ‘implementation agreement’ to commence the development.