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GAZETTE NOTICE NO. 12817

THE ENERGY AND PETROLEUM REGULATORY AUTHORITY GUIDELINES FOR ALLOWED RETURN ON INVESTMENT PURSUANT to section 163 (3) of the Energy Act

ACT

PURSUANT to section 163 (3) of the Energy Act, 2019, the Energy and Petroleum Regulatory Authority publishes guidelines for the computation of allowed Return on Investment for generation, transmission and distribution projects in the country. The return on investment shall be the weighted average cost of capital. The Weighted average cost of capital shall be the average of the cost of equity and debt, weighted by the proportions of equity and debt that an efficiently financed company can be expected to use to fund its activities. The Cost of equity shall be as determined by the Authority using the Capital Asset Pricing Model (CAPM) approach. The cost of debt shall be the actual cost of debt supported by term sheets. The optimal capital structure shall be 75:25 (Debt: Equity) mix. The tax rate shall be the income tax rate as prescribed by the Income Tax Act. DANIEL K. BARGORIA, Director-General.

DANIEL K. BARGORIA,

Director-General.

Extracted Entities (1)

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12817

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Act / Legislation: THE ENERGY AND PETROLEUM REGULATORY AUTHORITY GUIDELINES FOR ALLOWED RETURN ON INVESTMENT PURSUANT to section 163 (3) of the Energy Act
Signed By: DANIEL K. BARGORIA
Title: Director-General
Page: 1
Extraction Method: regex

Source Gazette

Vol. CXXIII No. 238

Published 17th November 2021