The Energy Regulation and Markets Review - Stikeman Elliott

Turkey
of a preliminary licence within the one-month time frame, also forfeits its generation
licence and the performance bond it had provided to EMRA. Any generation licence
or autoproducer licence applicant who wishes to withdraw its application within one
month of the effective date of the Draft EML may do so without risking its performance
bond since EMRA will return it to the applicant.
Market operation activities
Article 11 of the Draft EML introduces a new market activity called the ‘market operation
activity’. It is defined as an ‘operation of organised wholesale markets and financial
settlement of the activities realised in such markets’. This activity will be carried out by
the Enerji Piyasalari İşletme A.Ş. (‘EPİAŞ’) under its market operation licence, which
will be issued by EMRA. This activity will be transferred from Piyasa Mali Uzlaştirma
Merkezi (‘PMUM’) to EPİAŞ. Paragraph 4 of Article 11 sets out the basic duties of
EPİAŞ, which are in essence to operate as a market operator.
Share and facility transfers
Under the Current EML and the Licensing Regulation, EMRA approval is required
prior to the share transfer of 10 per cent (5 per cent for listed companies) or more of the
shares of the licence holder, an amendment to the articles of association of the licence
holder, or a transfer of the generation facility. The Draft EML abolishes EMRA approval
requirement for these transactions and instead requires ‘notification’. As per Article 5 of
the Draft EML, the licence holder will be obliged to notify EMRA of a share transfer
of 10 per cent (5 per cent for listed companies) or more of the shares of the licence
holder, changes in the control of the licence holder and any transaction resulting in
a change in the ownership of the generation facilities; however, licence holders whose
tariffs are subject to EMRA regulation will continue to be subject to the ‘prior approval’
requirement for a share transfer of 10 per cent (5 per cent for listed companies) or more
of its shares.
Distribution companies
It appears that when devising the Draft EML, the Ministry paid special attention to
distribution companies as the Draft EML introduces the following substantial changes
to distribution activities.
Appointment of an independent board member
The Draft EML provides that an independent board member must be appointed to the
board of directors of the licence holders whose tariff is subject to the EMRA regulation.
Generation companies’ shareholding restriction
Under the Current EML, generation companies may not take the control over distribution
companies. This restriction has been removed with the Draft EML.
Distribution companies’ shareholding restriction
Article 9 of the Draft EML prohibits distribution companies from involving any activity
other than distribution activities. Under the same provision, distribution companies will
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