Imf Unhappy With Stagnant Electricity Price

By Ardit bejko
WASHINGTON – Promises of better KESH management and reduced imports might not be enough to offset financial losses of the state-run power power provider, said Gerwin Bell, head of the International Monetary Fund (IMF) mission in Albania.
The IMF is urging the government to change its minds and increase the price of electricity as the only effective way of improving KESH’s situation.
Last year, KESH’s losses equaled 2.5 percent of the GDP, said Bell. This amount of money is almost equal to the funds that Albania spends for its healthcare system. “In our program, we foresee that only half of this amount, that is 1.2 percent, can be acceptable in macroeconomic terms,” Bell added.
The IMF advised the government to increase the price of electricity in order to make up for the losses. Higher prices would make KESH more attractive in the eyes of foreign investors now that the company is approaching the privatization of its distribution agency. In spite of the IMF recommendation last year to raise prices by 30 percent, the Albanian Electricity Regulatory Authority decided to increase its price by only 20 percent last March.
Bell said KESH’s current situation of is worse than before. “The current level of income is causing new problems. First, KESH should needs collecting unpaid bills again, because the situation has changed drastically during the first four months of this year,” said Bell. “Second, it is not clear why KESH has a major increase in personnel costs.” Bell asked for more efforts in investigating the increase.
The IMF will examine the situation in the next month and will then discuss with the government about viable solutions to the different problems.