Law No. 2 of 1998 concerning the regulation of water and electricity sector.

This Law establishes various bodies, including the Abu Dhabi Water and Electricity Authority, the Abu Dhabi Power Corporation, the Abu Dhabi Water and Electricity Company and the Regulation and Supervision Bureau for the water and electricity sector and defines their functions and powers. The Act provides rules for operations in the water and electricity sector of Abu Dhabi.
The Authority shall be responsible for formulation and implementation of the Government policy in the water and electricity sector and shall have various operative tasks in this sector. It shall also have control over the Water and Electricity Department. It shall be the duty of the Abu Dhabi Water and Electricity Company to ensure that there is provided sufficient production capacity to ensure that, at all times, all reasonable demand for water and electricity in the Emirate is satisfied and the Company shall charge each licensed distribution operator a bulk supply tariff in respect of supplies of water and electricity made to it.
The Act also provides for the licensing of ‘regulated activities' including: (a) the desalination of water; (b) the combined generation of electricity and desalination of water; and (c) the transmission and distribution of water. Licences shall be granted by the Regulation and Supervision Bureau. The Law allows domestic or foreign private sector entities to participate in the finance, design, construction, ownership, operation and maintenance of: (a) production facilities; (b) facilities for the transmission and/or distribution and/ or storage of water and electricity; (c) facilities for the supply of water; and (d) the business of any licensed operator.