ETIP: Abu Dhabi is one of the world’s most exciting locales for industrial companies. To continue to increase the emirate’s competitiveness and productivity level, the Electric Tariff Incentive Program (ETIP) has been created.
Based on the values of efficiency, transparency, long-term effectiveness, and productivity, this program is one of the most impressive in the world. Read on to learn everything you need to know about the ETIP in Abu Dhabi.
1. What is the ETIP?
Started by the Industrial Development Bureau (IDB) in 2019, the Electrical Tariff Incentive Program (ETIP) was established to promote Abu Dhabi industries by decreasing electricity tariffs.
The purpose of this program is to bolster further Abu Dhabi’s reputation as a favoured location for industrial projects. Moreover, the project aims to increase the economic impact of the Abu Dhabi industrial sector and to make the emirate’s energy usage more efficient. The ETIP encompasses all industrial sectors, excluding free zones.
2. How does the ETIP program work?
The ETIP works by providing reduced electricity costs to manufacturers in Abu Dhabi that have obtained an industrial license and satisfy specific criteria. The reduced electricity tariffs are subsidized through tariff rebates. Businesses are assigned scores based on specific parameters and standards. These criteria include:
- Economic Impact (50% weight), including:
- Investment in Abu Dhabi
- Expatriate contribution
- Productivity (30% weight)
- A measure of value add (= output minus input value) per worker
- Connectivity Load (20% weight)
- Minimum of 5MW in ADDC/AADC Site Power Connection detail form
3. What do you need for your application?
Several independent third-party certifying bodies are authorised to grant scores based on these criteria, particularly economic impact, productivity, connectivity load, and electricity management load. To qualify for the program, your company needs to get a score that is higher than 50. There are three categories that you can fall into A (50-59), B (60-79) and C (80+).
An industrial entity that is more than six months from the date of issue of its production/operational license from the Abu Dhabi Department of Economic Development (ADDED) is eligible to apply to the program as an existing company.
An industrial entity that has an “under construction” license issued by ADDED or is within its first six months of operation from the date of issue of its production/operational license (issued by ADDED) is eligible to apply to the program as a new company.
Almost all of the same parameters apply to both categories. However, for new companies, instead of calculating the productivity score, a weight of 30% is given to their supply chain support score. This is calculated by dividing the AD logistics fees and charges over the UAE total logistics fees and charges.
4. How do you apply for an ETIP certificate?
To make the process as easy as possible, the ETIP certification process is streamlined so that all steps can be done online and within a single portal. This means that you can apply, upload your documents, select your certifying body, and receive your ETIP certificate from the same online platform. Also, keep in mind that there are no fees for applying for the ETIP certificate.
Once you have registered for this initiative and logged into the platform, you can then select IDP industrial services and choose “electricity tariff request”. From there, you can enter the industrial license number that requires an electricity tariff and complete all the required fields. You will then be prompted to select the certifying bodies you want to use. The next major step is to upload the required documents and then “submit application” and “request for quotation”.
From there, the certifying bodies you selected will examine your documents and prepare quotations. Once they have submitted their quotes, you will be notified so that you can review the numbers and choose the body you want to award. Your awarded certifying body will then begin the process of auditing your application before issuing your scorecard and a summary report that you will sign.
If you score 50 points or more, IDB will issue your certificate, determining your granted category. If you score less than 50 points, the IDB will send you a letter of regret. Upon obtaining your certificate, you must submit it to the Abu Dhabi Distribution Company (ADDC) to take advantage of the reduced electricity tariffs.
In terms of timeline, the evaluation and verification of your documents by your certifying body may take up to a month, while your final ETIP enrollment certificate will be issued within a week.
One of the significant benefits of the ETIP is that it has been created as a long-term programme. The ETIP certificate has a validity of one year from the issue date. That being said, you can utilise the same certification for ten years; you just have to renew it on a yearly basis.
There is no denying that now is the right time for companies to apply for their ETIP certification.
As one of the best auditing firms in UAE, including Dubai and Abu Dhabi, and an authorised certifying body, MBG is the perfect partner to help you get your essential ETIP certificate. Not only do our consultants have the experience and in-depth knowledge required to assist you in obtaining this certificate (no matter which manufacturing industry), but we also offer tailored audit and assurance services to ensure that your company is accelerating in all regards.
Are you considering applying for the ETIP certificate? Why or why not? What additional questions do you have about the program or the certificate?
Naresh Manchanda is a Partner at MBG Corporate Services, an international organization supporting clients across Asia, Europe and the Middle East and providing sustainable solutions and strategies that drive business transformation. Established in 2002 and headquartered in Singapore, MBG is a 450-strong member team that operates out of Europe, the Middle East and Asia, providing Legal, Risk, M&A, Tax, Strategy, Technology and Audit Services.
References: https://idb.added.gov.ae/incentives/etip https://www.mbgcorp.com/ae/audit-and-assurance/electrical-tariff-incentive-program/ https://www.khaleejtimes.com/kt-engage/acquiring-etip-certificate-now-gets-easier-with-mbg#:~:text=If%20you%20are%20an%20Abu,.mbgcorp.com%2Fae https://www.mondaq.com/economic-analysis/876202/electrical-tarif-incentive-program-etip--abu-dhabi39s-next-step-towards-localization