The Electric Concession Law (Ley de Concesiones Electricas)

The Electric Concession Law (Decree-Law 25844 of 1993) provides the legal framework for the electric sector in Peru. The law states that a definitive concession is required for the development of electric generation energy that uses hydraulic and other renewable resources (for installed power over 500 KW).

The law establishes that premium-fee must be determined considering a 12% discount rate. This fee can only be modified by the Ministry of Energy and Mines, after a study commissioned by the Electricity Tariff Commission to specialized consultants, which determines that the rate set is different from the Risk Free Rate plus the risk premium in the country. In any case, the new rate fixed by the Ministry of Energy and Mines, could not differ by more than two percentage points of the current rate.

Want to know more about this policy ? Learn more