Power Supply Agreement Template for the United Arab Emirates

A Power Supply Agreement is a comprehensive legal contract that governs the relationship between electricity providers and consumers in the United Arab Emirates. Under Federal Law No. 2 of 2019, which regulates the UAE electricity and water sector, these agreements establish the framework for power generation, transmission, and distribution. Whether you're dealing with major utilities like DEWA in Dubai, TAQA in Abu Dhabi, or SEWA in Sharjah, you need a properly structured agreement to secure reliable power supply for your operations.

When do you need this document?

You require a Power Supply Agreement when establishing new commercial or industrial operations that need dedicated electricity supply arrangements. This includes manufacturing facilities, data centers, shopping malls, residential developments, and government projects requiring specific power capacity and reliability standards. The agreement becomes essential when your power requirements exceed standard residential or small commercial connections, or when you need guaranteed power quality and availability for critical operations. Construction projects and infrastructure developments also require these agreements to secure adequate power supply during development and operational phases.

Key legal considerations

Your Power Supply Agreement must address several critical legal elements to ensure enforceability under UAE law. The contract should clearly define the parties' obligations, including the supplier's duty to maintain continuous power supply and your responsibility for timely payment and equipment maintenance. Technical specifications must be precisely detailed, covering voltage levels, frequency standards, and power quality parameters as per Emirates Authority for Standardization and Metrology (ESMA) requirements under Federal Law No. 31 of 2006. Force majeure provisions are crucial given the region's extreme weather conditions. The agreement should also include liability limitations, termination procedures, and dispute resolution mechanisms that comply with UAE Commercial Transactions Law (Federal Law No. 18 of 1993). Environmental compliance clauses are increasingly important under UAE Federal Law No. 24 of 1999, especially for industrial customers with significant power consumption.

Legal requirements in United Arab Emirates

Under Federal Law No. 2 of 2019, all power supply arrangements must comply with federal regulatory frameworks while adhering to emirate-specific regulations. In Dubai, you must comply with Dubai Law No. 6 of 2011, which governs power generation and distribution within the emirate. The agreement must be executed in Arabic or include certified Arabic translations for official purposes, as required by UAE courts. Your contract must incorporate technical standards established by the relevant emirate authority, whether DEWA, TAQA, SEWA, or FEWA, and ensure compliance with their specific connection procedures and safety requirements. Payment terms must align with UAE Civil Code provisions under Federal Law No. 5 of 1985, and any security deposits or guarantees must comply with UAE banking regulations. The agreement should also address regulatory changes and tariff adjustments that may occur during the contract term, ensuring both parties understand their rights and obligations when government policies change.