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Need for Energy: What regulates Investing in the Solar Energy Sector in Lebanon?

Amid the Lebanese crisis, it is no longer surprising to find solar panels above the rooftop of each house, apartment, or university. Not a secret, Lebanon has a deficiency in non-renewable energy sources. Due to the struggles in the electric sector, many businesses are investing in the solar panel technology procurement, set up and installation. Seems to be the new big thing!

The question now is: Can those interested in investing in solar energy take it o the next level and engage in mass production and distribution of solar power? And are these local business and their respective foreign business partners aware of the legal requirements needed to establish and/or be involved in a solar energy venture in Lebanon?

On the establishing of privatized electricity companies, Article 4 of the 2002 Law number 462 on regulating the electricity sector in sets the basis that would foreign investors to take part in the production and distribution of electricity. It presents that by a decree taken by the Lebanese council of ministers it is permissible to establish one or more joint-stock companies, subject to the provisions of the Trade Law (with the exception of Article 78 thereof), each a ?privatized company? whose purpose is to carry out all or some of the activities, provided however that the production and distribution activities are carried out after obtaining a license granted in accordance with the provisions of the referenced law number 462.

An incorporation decree shall specify the capital of each privatized company, which may be in a foreign currency, and the assets and liabilities that will be transferred, and approves its articles of association proposed by the council of ministers, considering that the shares of each privatized company will be fully owned upon incorporation by the Lebanese state or any person of the law. The year in which it remains the sole shareholder until the company is fully or partially privatized. After partial or total privatization, members of the privatized company?s board of directors are chosen by the general assembly without being bound by the nationality requirement stipulated in Article 144 of the Trade Law, provided that the state is represented throughout the period of its contribution to the capital of each privatized company by at least one member appointed by the Lebanese council of ministers.

True, the Lebanese Parliament passed Law Number 462 in 2002 that allows the foreign private sector to participate in electricity generation and distribution venture, but the needed directives and regulations are yet to follow but can foreign venture capital looking to invest in the Lebanese booming solar energy sector, setup their business early enough to harness the opportunity and what legal vehicles, frameworks and set ups can they employ?

Liliane Timani

LLb - Legal Researcher & Writer