Electricity distributor’s budget at risk due to lack of rainfall

Tirana Times
By Tirana Times October 22, 2019 13:44

Electricity distributor’s budget at risk due to lack of rainfall

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  • On a three-month basis, the MFE systematically collected, processed and analyzed the necessary information concerning the financial performance indicators of the three companies in the energy sector

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TIRANA, Oct. 22 – The lack of rainfall led the Electricity Power Distribution System Operator (OSHEE) to increase  the requests for funding through the state budget. The Ministry of Finance and Economy predicted that financial support to the OSHEE may amount to 40 million euros by the end of 2019, considering the disbursements and unfavorable hydric situation in 2018 and 2019. The MFE asked the Ministry of Infrastructure and the OSHEE to take a number of measures, starting with the reassessment of the financial position, by taking into consideration – through steady and realistic predictions – the expected developments in domestic energy production. They also need to focus on the reviewing of the investment plan for 2019, by referring to the Plan for the Financial Consolidation of the Public Power Energy, in agreement with the World Bank, where the OSHEE sh.a must respect a level of investments at about 40 million euros per year for the next three years.  Necessary measures should also be taken for the optimal management of liquidations, the reduction of operational costs of OSHEE’s expenditures, which increased significantly in 2019 compared to the previous year. On a three-month basis, the MFE systematically collected, processed and analyzed the necessary information concerning the financial performance indicators of the three companies in the energy sector.

These measures are taken with the purpose of identifying, assessing, monitoring and reporting the fiscal risks which emerge from public enterprises with an overall state capital as well as from the energy sector in particular, considering its strategic importance and issues. During the first quarter of 2019, compared to the same period in 2018, it was observed that income declined by a considerable amount of 51 million euros or 24 percent, while expenditures declined by 29 million euros or 14 percent. This led to the following results:

  1. The financial result (profit/loss) during this quarter was negative, marking an amount of 14 million euros in loss.
  2. The total amount of Assets and Liabilities increased by 6 percent and 2 percent, consequently boosting capital by 19 percent.
  3. The profit margin, return on assets and capital demonstrate a declining trend and therefore an overall poor performance of the sector.
Tirana Times
By Tirana Times October 22, 2019 13:44