Law 57-07 on Renewable Energy (supported by the 2008 Renewable Energy Regulating Decree No. 202-08)
The objectives of the Law include:
- To diversify energy supply
- To reduce dependency on fossil fuel imports
- To promote private investment
- To mitigate the environmental impacts of fossil fuels
- To contribute to decentralisation of power and biofuel production; and increase competition between providers
The Law sets out tax exemptions and incentives for investors in renewable energy production projects. This constitutes a 100% customs tax exemption and a 10 year income tax exemption. For self-producers (e.g. domestic) a credit of up to 75% on capital costs is provided against income tax. There are also provisions for community projects.
This includes, but is not limited to, small hydro-electric installations with capacity of not more than 5MW; wind parks with capacity of not more than 50MW; and electric and solar installations of any type and power levels.
There are special rules for production of bioethanol, biodiesel and any other synthetic renewable fuel. Specifically, the Law provides for a 10-year exemption on income tax, duties, contributions and any other taxed from the beginning of operations for companies.
Car fuels to contain 10% of biofuel by 2008
10% of electricity produced from renewable sources by 2015, and 25% of electricity produced from renewable sources by 2025