New Geothermal Law (No. 21/2014)

The New Geothermal Law (No. 21 of 2014) - was recently issued to replace Law No. 27 of 2003 on Geothermal ("Old Geothermal Law").

The New Law relaxes the old legal and regulatory framework. The main changes introduced by the New Law include:

• geothermal activities no longer considered ‘mining activities’: because mining activities are prohibited (exploration or exploitation) in high conservation value forest areas, previous classification of geothermal as mining severely limited geothermal development activities.
• distinction between direct and indirect utilization 
• new restrictions on the transfer of licenses and shares in entities holding such licenses
• concept of a mandatory ‘production bonus’: whereas the Old Law was vague as to requirements regarding payments, the New Law introduces a mandatory production bonus payable to the local government in which the geothermal field is located.
• centralization of the tender process for indirect utilization projects

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