The Energy Regulation and Markets Review - Stikeman Elliott

Norway
from 1,000 (736kW) to 4,000 natural horsepower. Waterfalls under this limit may be
acquired or rented without concession.
Norwegian state enterprises, municipalities and counties will normally be
entitled to a concession for the acquisition of a waterfall. The same applies to joint-stock
companies, partnerships and other companies in which at least two-thirds of the capital
and the shares are owned by a Norwegian state enterprise, a Norwegian municipality or
county (i.e., a publicly owned company).
Private entities (domestic and foreign) as well as publicly owned foreign companies
may, on application, be granted a concession to acquire ownership to one-third of the
waterfall or the company registered as a owner of the waterfall.
Prior to 2008–2009 concessions for the acquisition or rent of waterfalls or other
acquisitions of production rights were given to private owners or foreign public owner
for a maximum of 60 years. In contrast, Norwegian public owners or publicly owned
companies may be (and have always been) given concessions in perpetuity.
When a concession was granted for a maximum of 60 years, several conditions
would apply. The most important concerned reversion of the shares or the waterfall
rights (including power plants, etc), which would be assigned to the Norwegian state
without compensation at the end of the concession period. There are still concessions
with such conditions in place, so several power plants will likely revert to state ownership
in the future. To avoid reversion a private owner may transfer ownership (through a
regular sale) to publicly owned companies before the date for reversion. This will most
likely lead to transactions regarding hydropower plants in the future.
The reversion scheme was challenged by the EFTA Surveillance Authority (ESA)
under the EEA agreement in 2006. After a ruling in the EFTA Court the Norwegian
government had to change the legislation. The system of reversion was abolished for new
acquisitions, and the private entities and publicly owned foreign entities were no longer
able to acquire waterfalls. Such entities are now only able to acquire one-third of publicly
owned waterfalls or companies holding such assets.
As an equivalent to transfer of ownership it is still possible to lease waterfall rights
with adjacent generators, but only for a maximum of 15 years. The lessee has to apply for
a concession when parties enter into such agreements.
According to the Energy Act a licence is necessary to own and to operate electricity
grids (transmission and distribution) and certain installations such as transformers.
iv Transfers of control and assignments
Transfer of more than 20 per cent ownership to companies holding licences, according
to the Industrial Concession Act, will need an acceptance from the government (OED).
If as much as 90 per cent is acquired this will be considered as an acquisition of the
underlying assets and will need a complete concession process. Generally, the Act is
construed as catching up with agreements where a party receives a position equivalent to
direct ownership through voting rights, shareholders agreements, etc.
In contrast with the Industrial Concession Act the Energy Act has no regulation
on partial transfer of ownership to companies holding such assets or licences; however,
acquisition of more than 90 per cent will be considered as a change of ownership to the
underlying assets, even if the business continues unchanged.
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