Why ETIP launched in the UAE?
The Energy Tariff Incentive Program 2.0 (ETIP) is an expansion of the Electric Tariff Incentive Program 1.0 (ETIP) to include gas tariff incentive in the existing Electricity Tariff Incentive Program for eligible manufacturing companies in Abu Dhabi based on the below listed eligibility parameters:
- Economic impact
- Spending on logistics
- Productivity
- Energy management efficiency
The program was launched to achieve the following objectives in industrial sector of Abu Dhabi:
- Improvement of their impact on the country’s GDP.
- Productivity improvement of manufacturing set-up; and
- Energy consumption efficiency enhancement.
As a series of Abu Dhabi economy enhancement programs of 'Ghadan 21’, Industrial Development Bureau (IDB) launched the ETIP initiative In June 2019.
Manufacturing companies in Abu Dhabi, who wish to avail incentive on electricity and gas tariffs are required to prepare and declare their ETIP score to Certifying Bodies empaneled by Department of Economic Development (ADDED).
Incentive is based upon the percentage of score achieved which is tabulated below:
| Category | Score | Electricity Tariff rate/unit* | Gas Prices/unit* |
|---|---|---|---|
| A | >= 80% | 20 Fils | 7.9/MBTU |
| B | Between 60%-79% | 22 Fils | 9.1/MBTU |
| C | Between 50%-59% | 25 Fils | 10.3/MBTU |
*Prices are subject to change.
If the score of applicants is below 50%, the actual tariff prices are chargeable.
Newly established manufacturing entities (Manufacturing Entities which have “under construction” license issued by ADDED and/or companies which are in operation for first 6 months from the date of issue of “production/operational” license issued by ADDED can also obtain ETIP Certificate with relatively less requirements compared to existing manufacturing entities.
The program was established to resolve some of the current issues facing the manufacturing sector in Emirate of Abu Dhabi. The electricity and gas tariff prices had an enormous increase in the past years, which created uncertainty of electricity and gas prices. Moreover, the enormous increase in the electricity and gas prices added an unplanned extra expense on the operations of the manufacturing entities impacting their business.
ETIP has enabled manufacturing entities in Abu Dhabi to save millions of dhirems on their electricity and gas cost, which is the one of the foremost objectives of seasoned entrepreneurs to do business in cost effective manner.
To acquire the ETIP Certificate, manufacturing entities need to have IFRS complied audited financial statements, which should not be older than 18 months from the certification year.
1. Existing manufacturing entities
ETIP Score is determined based on following factors for existing manufacturing entities:
| Attribute (%) | Electricity Score Weightage (%) | Gas Score Weightage (%) |
|---|---|---|
| Investment | 10 | 10 |
| Investment top up | 05 | 05 |
| Emiratisation | 10 | 10 |
| Emiritisation number | 05 | 05 |
| Skilled labour | 10 | 10 |
| Supply chain support | 10 | 10 |
| Productivity | 30 | 30 |
| Demand Side Management Efficiency | N/A | 20 |
| Energy management system, where connected load >=5MW | 10 | N/A |
| Connection Loan >=5MW | 10 | N/A |
| Energy management system, where connected load <=5MW | 20 | N/A |
2. Newly established manufacturing entities
ETIP Score is determined based on following factors for newly established manufacturing entities:
| Attribute (%) | Score Weightage (%) |
|---|---|
| Investment | 30 |
| Investment top up | 20 |
| Supply chain support | 30 |
| Electricity management system | 20 |
Energy Management Incentive Program (ETIP) Score Improvement Consultancy
We understand the importance of doing business in cost effective manner and so our client’s need to avail available government incentives to reduce cost of business operations, hence we have developed a specialised sub service line in our firm who is well versed with all ETIP Score effecting parameters and therefore we recommend score improving measures to our clients that are achievable by business process re-engineering and corporate restructuring.
Our ‘Score Impact Analysis Consultancy Report’ identifies areas of score improvement in each of the applicable score contributory factors of the ETIP Program and includes recommendations of measures to implant for increasing score in accordance with ETIP Guidelines, thus enabling our clients to save millions on Electricity / Gas cost in each fiscal year by availing incentive program promulgated by the Industrial Development Bureau of Abu Dhabi Department of Economic Development (ADDED).
How we stand out as an Expert ETIP Consultant
Our managing partner is experienced in massive number of ETIP engagements in PJSCs, MNCs and large sized regional manufacturers from Big Four Accounting Firms, right from the implementation of the ETIP Program by ADDED in mid 2019, therefore we are an expert ETIP Consultants with required level of knowledge and confidence to deal with any requirement of our clients with respect to arrangement of ETIP Certificates and drafting of ETIP Score Improvement Plan in accordance with pertinent guidelines.
Being expert ETIP Consultants we are well aware of the updated Guidelines by IDB and ADDED and have deeply rooted assimilation with dynamics that effect ETIP score in any business environment.
In addition to our expert ETIP knowledge and experience, we go extra miles with our clients to stand out the competition by performing below activities during our service delivery:
- Preparing ETIP template of our clients by ensuring that all the ETIP score gaining areas are included in the template to achieve optimal score that our clients are eligible to in accordance with guidelines.
- Making our clients understand about the parameters of ETIP score and the determining factors that affect the score in respective business case.
- Prepare working files in a way to ensure seamless approval of our client's ETIP Certificate.
- Ensuring that only relevant information is required that have notable effect on the ETIP Score of our clients, to avoid unnecessary delays in gathering and verifying information.
