Aid in the Funding of the Costs of Connecting to a Natural Gas Distribution System
and in the Funding of the Costs of Converting Internal Systems to Natural Gas Use
(Director General Directive 4.5)
Index
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Background
Definitions
Avoidance of Duplication of Funding
The roles of the Director and the Committee
Threshold Conditions
Submission of the Applications for Aid
Consideration of the Applications for Aid
Actions to be Performed by the Corporation following the Approval of the Aid
The Amount of the Aid and the Payment Structure
Cancellation of the Aid
Miscellaneous
Budget
Application
Appendices
Ministry of Industry, Trade and Labor
Director General Directives
1.
Background
In view of the economic and environmental benefit that the replacement of
expensive fuels with natural gas is expected to yield for the economy, and for the
purpose of promoting its use, the government decided, in decision No. 175 dated
12.5.09, to grant incentives to those connecting to the natural gas grid. The
incentive shall be in the form of participation in the costs of connecting to the
natural gas distribution system and in the costs of converting of the internal
systems of the client's facilities to natural gas use. The participation in the costs
shall be carried out by the grant of aid in a total amount for the aforesaid two
purposes.
The financial aid shall be given through the Investment Center in the Ministry of
Industry, Trade and Labor (hereinafter: "the Ministry of ITL"), in a total amount
of up to 120 million NIS for all of the natural gas distribution areas.
2.
Definitions
In this Director General Directive, the following terms shall have the definition
ascribed to them in this section, unless otherwise expressly stated in this directive:
2.1.
"Distribution Areas"
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
Gas distribution sections in accordance with the tender issued by the
Ministry of Infrastructures for the granting of a license for the
distribution of national gas. As of the date of the publication of this
directive, tenders were issued for the following sections:
2.1.1.
"The Negev region" – the local and regional councils listed in
Appendix A of this directive.
2.1.2.
"The central region" - the local and regional councils listed in
Appendix B of this directive.
2.1.3.
"The southern region"- the local and regional councils listed in
Appendix C of this directive.
Should there be tenders for additional distribution sections, this directive
shall apply to those as well, and notice thereof shall be published in the
press. In the notice, the definition of the aid regions and the budget that
shall be earmarked for the aid shall be published, among other things.
"Natural Gas"
A mixture of hydrocarbon and non-hydrocarbon gasses with a
significant content of methane (CH4) which is in a gaseous state at a
temperature of 15°C and at normal atmospheric pressure, and the gas is
pumped directly from the depths of the earth, undergoes treatment and
cleaning and is transported for consumption.
"Recognized Expenses"
The amount of the costs deriving from the conversion of the internal
systems of the client's facilities, for which aid may be received in
accordance with the stipulations of Appendix D.
"The Committee"
As defined in section 4 below.
"The Director"
The Director of the Investment Center in the Ministry of ITL.
"Consumer"
A gas consumer who connected to the natural gas distribution network in
the relevant distribution region.
"Medium Sized Consumer/Large Consumer"
A consumer whose expected annual natural gas consumption exceeds
100,000 cubic meters per year and is defined as a medium sized
consumer or a large consumer in the agreement signed between it and
the holder of the license for the distribution of natural gas in the relevant
distribution region.
3. The Avoidance of Duplication of Funding
No aid shall be granted in the framework of this directive for the recognized
expenses for which aid has already been granted by any other government body.
4. The Roles of the Director and the Committee
4.1.
4.2.
4.3.
4.4.
4.5.
4.6.
4.7.
4.8.
4.9.
4.10.
The Director shall be responsible for the implementation of all of the
provisions of this Director General directive, including the accepting the
applications, the preparation of all the material required by the
committee for taking its decisions, and after the approval of the
application – inspections regarding the fulfillment of the conditions for
the grant of aid, and of all the processes involved in its payment.
For the purpose of carrying out the aforesaid, the Director shall appoint a
team of employees that shall operate in accordance with his instructions.
The decision on the grant of aid shall be taken by a committee the
composition of which shall be as follows:
4.3.1.
The Director of the Investment Center shall chair the
committee.
4.3.2.
Chief Economist, Investment Center.
4.3.3.
The representative of the Natural Gas Authority in the Ministry
of National Infrastructures.
4.3.4.
The representative of the Comptroller of the Ministry ITL.
4.3.5.
The representative of the Budget Department of the Ministry of
Finance.
The legal quorum for decision taking by the committee is at least 3
members of the committee, including the chairperson.
In legal matters, the position of the legal council accompanying the
committee shall be decisive. The position of the representative of the
Comptroller shall be decisive in budget matters.
The committee shall convene at least once a month, in order to approve
the applications submitted since the committee last convened. However,
if no applications are submitted, the meeting shall be postponed.
The committee shall have the authority to take any decision required for
the carrying out of this directive, including –
4.7.1.
To examine the various applications;
4.7.2.
To request the applicants to clarify their applications, as
needed;
4.7.3.
To carry out any act for the purpose of examining the
applicants' representations;
4.7.4.
To approve grant applications;
4.7.5.
To prescribe conditions in the approval granted to the
applicants;
4.7.6.
To take any decision required for the purpose of operation the
track stipulated in this Director General directive.
The committee may decide to approve any application, in whole or in
part, or to reject it.
The committee shall keep minutes of its meetings. The minutes shall be
signed by the Chairperson of the committee.
The decisions of the committee shall be taken by a majority vote. In the
event that the committee reaches an impasse on voting, the vote of the
chairperson shall be decisive.
5.
Threshold Conditions
5.1.
The threshold conditions for submitting an application for aid are:
The applicant for aid is a consumer as defined in this Director General
directive, and a signed agreement exists between the consumer and the
holder of the license for the distribution of the natural gas in the relevant
distribution region.
5.2.
The consumer is a "medium sized consumer" or a "large consumer".
5.3.
Where the applicant for aid employs, at the date of the application for
aid, more than two employees – it shall be required, in addition to the
aforesaid, to meet the terms of General Directive No. 0.4 on
"Conditioning Aid on the Observation of Social Responsibility"
(hereinafter – the Social Responsibility Directive) and to attach a
declaration and a request as mandated in this directive, according to the
text attached hereto as Appendix E.
6.
Submission of the Application
6.1.
The applicant for aid shall submit its application on the form appended
as Appendix F of this directive.
6.2.
The applicant for aid shall attach to its application the following
documents:
6.2.1.
A signed agreement with a holder of a license for the
distribution of natural gas in the relevant distribution region.
6.2.2.
A plan for the conversion of the internal systems of the
applicant to natural gas use.
6.2.3.
Where the applicant for aid employs, at the date of the
application for aid, more than two employees – it shall attach a
declaration and a request according to the text attached hereto
as Appendix E.
6.2.4.
Any additional document required for the consideration of the
application.
7.
Consideration of the Applications for Aid
Applications that meet the threshold conditions shall be considered in the order of
their arrival and can receive the committee's approval of the grant of the aid.
8.
Actions to be Performed by the Receiver of Aid following the Approval of the
Aid
8.1.
8.2.
At the end of a year from the approval of its application, the applicant
for aid shall provide the Investment Center with documents attesting to
the actual use and consumption of the gas.
The corporation shall provide the committee and the Investment Center
with certification and data as per the requirements of the committee or
the Investment Center, at any time.
9.
The Amount of the Aid and the Payment Structure
9.1.
9.2.
The aid amount shall be at the following rates:
An applicant for aid whose application was approved shall be entitled to
aid in the amount of up to 250,000 NIS.
Payment of the aid shall be carried out in the following manner, and
subject to the fulfillment, by the applicant for aid, of the rest of the terms
of this directive:
9.2.1.
After the approval of the application by the committee the
applicant for aid shall submit a request for payment of the aid
to the Investment Center. The applicant shall attach the
following documents to the request:
a. A receipt from the holder of the license for the distribution
of the natural gas, for connection to the natural gas
network.
b. A list of the recognized expenses incurred by it, in
accordance with the stipulations of appendix D, in which
the types of expenses and costs shall be specified. The
applicant shall attach the receipts issued in respect of the
recognized expenses carried out, as well as the certification
of an expert engineer acting on its behalf, as said in
Appendix D.
9.2.2.
The approval of the aid shall entitle the applicant to receive the
following cumulative sums, subject to the stipulations of
section 9.2.3 below (the cumulative sums shall be hereinafter
referred to as – "The Calculation of the Aid Amounts").
a. A reimbursement of up to 50% of the amount of the receipt
as stipulated in section 9.2.1 a.
b. A reimbursement of up to 75% of the amounts of the
receipts in respect of the costs of converting the internal
systems to natural gas use that were approved by the
Investment Center, as stipulated in section 9.2.1.b.
9.2.3.
Where the calculation of the aid amount exceeds 250,000 NIS,
the applicant for aid shall not receive an amount exceeding
250,000 NIS.
Where the calculation of the aid amounts is less than 250,000
NIS, the applicant for aid shall receive the amounts of the
calculation as set out in section 9.2.2 above.
The amount approved for the applicant for aid shall be referred
to as – "The Aid Amount".
9.2.4.
Within 60 days from the date of the approval of the aid amount
as set out above, the applicant for aid shall be entitled to
receive 50% of it. After one year has passed from the date of
the approval and after the receipt of a reference regarding the
actual use and consumption of the gas – the applicant shall
receive the balance of the aid amount, within 60 days from the
9.2.5.
10.
date of receipt of the reference regarding the actual
consumption. However, should the status of the consumer
change and it shall no longer be a medium sized or large
consumer, the applicant for aid shall not receive the aforesaid
balance and it shall repay the first part of the aid, which he
received, within 30 days from the receipt of notice from the
Ministry of ITL.
Notwithstanding the aforesaid in section 9.2.4, in the event that
the Ministry of Finance's Comptroller General shall not
transfer the entire monthly funding in accordance to the
Ministry's approved budget, the Ministry may defer, for a
reasonable period of time, the payments of the aid, until the
completion of the funding by the Ministry of Finance, and the
applicant shall not be entitled to linkage differentials, interest
or any compensation for such deferment.
Cancellation of the Aid
The occurrence of one or more of the following events shall be deemed to
constitute a fundamental breach of the terms of this directive, and the committee
may decide to cancel the aid, in whole or in part, both the aid that had already
been paid and the aid not yet paid, and to demand the repayment of the portion
which had been paid with the addition of interest and linkage differentials, within
their meaning in the Adjudication of Interest and Linkage Law, from the date of
its payment to the date on which it was actually repaid.
Such events are as follows:
10.1.
10.2.
10.3.
10.4.
11.
The provision of false or data, at the submission of the application or
thereafter.
An annual gas consumption lower than 100,000 cubic meters per year,
or where the status of the consumer under the agreement with the holder
of the license for the distribution of the gas changes and it is no longer a
medium sized or large consumer.
Where the applicant for aid does not comply with the terms of aid
granted in the framework of a different scheme operated by the Ministry.
The breach of sections 11.1 and 11.2.
Miscellaneous
11.1.
An applicant who received aid from the Ministry of ITL in a different
framework and did not comply with its terms, shall not be entitled to
receive an approval for its application under the terms of this directive.
11.2.
A person that has unsettled debts towards the Ministry shall not be
granted aid.
11.3.
The committee does not undertake to approve any application.
11.4.
11.5.
11.6.
11.7.
11.8.
12.
13.
14.
The committee may disregard an application that is unreasonable, does
not meet the terms of this directive, or where, for any other reason, the
committee is not able to properly evaluate the application.
The Committee reserves the right to turn, during the course of the
examination and evaluation, to the applicants, in order to receive
clarifications on their offer or in order to remove any lack of clarity
which may arise during the course of examining the applications.
The grant of aid is subject to the approval of the budget, each year, to
budget limitations and to the Ministry's approved budget.
The receiver of aid undertakes to enable the Ministry of ITL or any
person acting on its behalf, including external parties on its behalf, at
any time, to audit its activities, on the dates and under the conditions as
prescribed by them, and to act in accordance with the Ministry's
instructions, as given from time to time.
Any change in the approval granted to the applicant shall require the
prior approval of the committee.
Budget
As of the date of the publication of the directive, the budget available to the
scheme is in the amount of 120 million NIS. Should there be any change in the
scheme's budget, notice thereof shall be published on the Ministry's website.
The sum of 15 million NIS was earmarked for each of the "Negev", "Central" and
"Southern" aid regions, amounting to 45 million NIS in total. The committee is
authorized to transfer funds from region to region, if necessary.
Application
This directive shall come into force on the date of its signing.
Appendices
The appendices attached to this directive constitute an inseparable part thereof.
Appendix A – The Negev Region
Appendix B – The Central Region
Appendix C – The southern Region
Appendix D – Recognized Expenses
Appendix E – Social Responsibility
Appendix F – Application Form
Please direct all questions to Mr. Itay Yeheskaly, Chief Economist, the
Investment Center, Tel: 02-6662839, e-mail: Itay.Yeheskaly@moital.gov.il
Sharon Kedmi
Director General
Jerusalem, 28 Kislev, 5771
5 December, 2010