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Electricity Tariff Incentive Program (ETIP)

Electricity Tariff Incentive Program (ETIP) For Industries in Abu Dhabi

Industrial Development Bureau of Abu Dhabi Department of Economic Development (DED) had launched an Electricity Tariff Incentive Program in the year 2019 in collaboration with Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC) with an intention to encourage investment and expansion in the manufacturing sector and to contribute to Abu Dhabi's goal of promoting a competitive industrial sector.

The initiative will assist companies in:

  • Reducing operational costs.
  • Enhancing competitiveness.
  • Encouraging technological transformation.
  • Encouraging energy efficiency.
  • Boosting productivity.
  • Enhancing economic impact

This program was established to resolve some of the  key issue faced by manufacturing sector in the emirate of Abu Dhabi. One of such issue is in relation to Electricity Tariffs, which is one of the major operational costs in the manufacture sector and the electricity tariff prices had an enormous increase in the past years, which created uncertainty in electricity prices and added unplanned extra expenses on the operations impacting the competitiveness of manufacturing entities.

This program is designed for 10 years from 2019 which helps manufacturers obtain reduced tariff based on the achievement of program objectives, thus lowering operating costs and can invest the savings towards R&D and further expansions.

Under this program, the manufacturers are eligible for discounted electricity tariffs under three slabs based on the ETIP scores (first category (C) with a ETIP score of ≥50 and <60, second one (B) with a score of ≥60 and <80 and the third one (A) with score of ≥ 80).

ETIP score is determined based on fulfilment of requirements under following criteria:

  • Economic Impact (50%) comprising of following attributes:
  • Investments in Abu Dhabi (15%)
  • Emiratization (10%)
  • Skilled labour (10%)
  • Supply chain contribution (15%)
  • Growth in productivity (30%) computed as value added per employee compared with previous year level.
  • Connectivity load (10%) for entities with load ≥ 5MW
  • Electricity Management score of 10% (or 20% in case of entities with connectivity load <5MW).

Key considerations for the manufacturing entities:

  • All entities with under construction or production industrial licenses (in Abu Dhabi excluding Free Zones) are eligible to participate in the program.
  • Each certificate is issued based on one industrial license only.
  • ETIP certificates to be obtained for each Factory and if more than one distribution account for a factory/license, needs to list all the accounts in the ETIP application.
  • Entities should have audited financial statements that do not have an publication/ issue date of more than 18 months.
  • Documents such as declarations of manpower, skilled labor, ADDC documents, WPS statistics reports, reconciliation of cost, Emarati salary details etc., to be maintained and submitted to ETIP certifying body and through the system.

Further details can be found in link > http://idb.added.gov.ae/en/incentives/etip

Contact our team at [email protected] for assistance in obtaining ETIP certificate.

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Zayd-mania
Zayd Maniar
Partner, International Liaison Partner
umesh
Umesh Narayanappa
Partner – Abu Dhabi