Kilian Bälz and Hussam Mujally
Libya has excellent conditions for renewable energies both in the fields of solar and wind energy, though the tremendous potential is thus far untapped. There are several reasons for this including regulatory shortcomings, conflicting administrative competencies, and a lack of funding in the electricity sector.
As part of a comprehensive decarbonization strategy, the Libyan National Oil Corporation (NOC) has recently claimed a leading role in the development of renewable energies.
Though the NOC at present lacks an explicit administrative mandate, this is a potential game changer. The NOC has the financial resources and administrative capabilities for the development of mega projects and for building the infrastructure to export green energy to Europe. Green hydrogen is expected to play a key role.
This paper outlines the legal framework for investments in renewable energies and green hydrogen in Libya. It shall provide investors with an initial overview of the legal and regulatory landscape. It is not meant as a substitute for legal advice on a specific transaction or project. It was completed in mid-January 2023.
There is no comprehensive legal framework for renewable energies in Libya. Instead, scattered pieces of legislation apply, and projects are usually based on a power purchase agreement (PPA) or investment agreement with the Libyan authorities.
Thus far, there is no statutory feed-in tariff, nor are there any specific provisions for the allocation of land or the connection of projects to the grid. Consequently, all project essentials such as allocation of land, construction and operation of the project, connection to the grid, purchase of electricity and pricing are subject to the contractual agreement between the investor (respectively the project company) and the off-taker of the electricity (usually a public entity).
Laws that apply to renewable energy projects include the following:
- Law 17/1984 Establishing the General Electricity Company of Libya (GECOL)
- Ministerial Decree Nr. 426/2007 Establishing the Implementing Authority for Renewable Energies (REAOL).
- Administrative Contracts Regulation 563/2007 (ACR) and CoM Decree 12/2023 on Government Procurement
- Libyan Civil Code (1953) and Commercial Code (2010)
- The Decree 207/2012 Regulating the Activity of Foreign Enterprises in Libya.1
- Law 9/2010 Promoting Investment (Investment Law), Decree 499/2010 enacting the Executive Regulations for the Investment Law (Executive Regulations) and Decree 61/2019 Reregulating the Privatization and Investment Board (PIB)
In October 2022, Decree 207/2012 was replaced by Decree 944/2022. The new Decree has been suspended since in order to better align existing legislation with the amendments that shall be introduced, so at the time of writing again Decree 207/2012 applies
Kilian Bälz – Amereller Legal Consultants. He is a partner focusing on project development and finance. He divides his time between AMERELLER’s Berlin, Cairo, and Tripoli offices.
Hussam Mujally – Amereller Legal Consultants