The electronic structure of two dimensional layered compound, FeOCl, is studied with the band model and the cluster model approximation employing Extended-Huckel (EH) method. We examine the effects of intercalation (e.g., localization of transferred electron, conductivity increase). FeOCl has the electronic structure typical for layered compounds as expected. For FeOCl-$Li_{1/2}$ system, the charge transfer from Li to the FeOCl lattice occurs, and electrons are built up almost exclusively on Fe atoms. The partially filled band of FeOCl-$Li_{1/2}$ complex is responsible for the increase in conductivity.